Last week produced a mix of economic reports that presented a modestly softer economy, but one that is not imminent danger of recession. Some of the softness, such as the contraction in the ISM Manufacturing Index and the weaker Employment Report, can be attributed to the continuing trade issues with China. Once the announcement …
The equity markets rebounded this past week to finish with their first weekly gain in five weeks. Optimism on international trade between the U.S. and China was the major catalyst for the weekly gain in stocks. With no significant corporate earnings news, we’ve stressed that economic and geopolitical news is likely to set market …
The final significant week of second quarter earnings brought upside surprises from several big retail companies, but an escalation of tariffs between the U.S. and China overshadowed everything and ended the week on the downside for the major equity indices. On second quarter earnings, 482 companies (>96%) in the S&P 500 have reported quarter-to-date. …
It was a volatile week in the stock and bond markets with each day providing a different catalyst to change market direction. The week started with continued concern over U.S. dollar / Chinese yuan exchange rate and trade/tariff issues. Optimism reigned on Tuesday as the White House announced a delay to some tariffs until …
The Chinese government’s move to weaken its currency relative to the U.S. Dollar rattled global markets early last week. The Yuan/Dollar exchange rate passed through the 7 Yuan-to-the-Dollar level. This makes the Chinese currency weaker (see “Currency Pegging” explanation below) and aids the pricing of Chinese exports in the global markets. The concerns over …
Following the Federal Open Market Committee (FOMC) announcement to lower its target range for the Fed Funds Rate by 0.25%, Fed Chairman Jerome Powell stated that the move was a “midcycle adjustment to policy” and that future rate cuts were not a guarantee. Despite the Fed Chairman’s comments, the markets are currently forecasting an …
On Wednesday, the Federal Open Market Committee (FOMC) will make a decision on its interest rate target. The current market probabilities are for a reduction of 0.25% which would bring the target range for the Fed Funds Rate to 2.00% to 2.25%. We can attribute most of the stock market tailwind over the past …
The stock market is often seen as a large system that moves in unison based on macroeconomic or geopolitical factors. During corporate earnings season, the bottom-up impact of each company reporting earnings can be seen individually, often with significant disparity, making it more of a market of stocks. The volume of second quarter earnings reports …
Second quarter earnings season takes center stage this week as 56 companies in the S&P 500 Index are scheduled to report earnings results. Most major banks will report earnings and we can see how they are navigating the current interest rate environment. Several industrial companies will also report earnings results and we can get …
An upside surprise to the June employment report last week tempered expectations that the Federal Reserve would be reducing short-term interest rate at the July FOMC meeting. The Labor Department reported that Non-Farm Payrolls increased by 224,000 in June versus an expectation of 160,000. This was a sharp reversal from May’s disappointing jobs report …
U.S. President Trump and President Xi of China met during the G20 meeting in Japan this week and agreed to restart trade talks between the two countries. Tariffs remain on $250 billion of Chinese imports but no new tariffs will be put in place for the time being. There is no time table for …
A double-shot of positive news lifted major market averages last week. Fed Chairman Jerome Powell reinforced his supportive posture to keep the U.S. economy growing and the White House announced President Trump and President Xi of China would meet during the G20 meeting in Japan at the end of this week. Both announcements supported …
The major market averages posted a second consecutive positive weekly return. With the lull between corporate earnings season, most movement came from macroeconomic data, politics, and some company commentary at investor conferences. Investors will have two big events to focus on for the balance of the month with the Federal Reserve meeting on June …
Continue reading “Will Key Meetings Satisfy Investor Expectations?”
Equities rallied last week as moderating economic data and Dovish comments from Federal Reserve Chairman Jerome Powell led investors to the conclusion that a short-term interest rate cut is on the horizon. The Fed Chairman’s speech on June 4th indicated the Fed would take appropriate action to maintain expansion of the economy in the …
Investors were surprised late last week by the announcement that the U.S. would impose a 5% tariff on all goods imported from Mexico and gradually increase them until the flow of illegal immigrants stopped. The economic and political uncertainty of this policy added to the uncertainty currently in the market from the U.S.—China trade …
The S&P 500 Index advanced 0.4% last week, its fifth consecutive weekly increase. Crude oil fell 2.5% for the week. As we near the end of the quarterly earnings season, much of the fundamental news from reporting companies is out and speculation on how current macro and industry data may impact earnings for first quarter …
Continue reading “Wrapping up Earnings and Focusing on Economic Data”
US-China trade expiration is getting an extension until after Trump and Xi meet later in March. Chinese vice premier Liu He has been in Washington for negotiations all week and into the weekend. Both sides seem eager to do something constructive, but it looks like nothing will be finalized until later in March. This stops …
Continue reading “Extending the U.S. – China Trade Deadline”
A deal was struck to avoid a resumption of the partial U.S. government shutdown last week. Macroeconomic Crisis One averted, even though there may be political ramifications of the President’s decision to push ahead with funding the wall for the U.S. southern border through emergency measures. We’re much more concerned about economics, business, and investing, …
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