The U.S. government is in Day 27 of a partial government shutdown, now the longest in history.
Past shutdowns have largely been a nonevent for the U.S. economy and stocks. Business and consumer confidence indicators usually decline and government spending drops during a shutdown, but any losses have typically been recouped quickly. As shown in the LPL Chart of the Day, U.S. stocks have also historically fared well after shutdowns, showing that any economic impact wasn’t enough to derail market rallies.
EM still looks like a better value than Europe. The MSCI Emerging Markets (EM) Index and S&P 500 Index are both trading at 5-6% discounts to their 25 year averages, while Europe is trading in line with its average, on a forward price-to-earnings ratio (PE) basis. Continue reading
No deal. Yesterday was another bump in the road for Brexit after more than two-thirds of the U.K. Parliament voted against British Prime Minister Theresa May’s separation deal. Continue reading
Yesterday’s U.K. Parliament vote was another bump in the road for Brexit.
As shown in the LPL Chart of the Day, the British pound and the euro have steadily declined over the past few months, weighed down in large part by pessimism around British Prime Minister Theresa May’s proposed plan for a European Union (EU) exit (or Brexit) Continue reading
Credit stress among banks has remained relatively calm recently, signaling an economic recession may not be as imminent as some investors fear.
Treasury yield curve steepens, spread to investment grade widens. The Treasury yield curve steepened over the past week despite recent data suggesting global economic activity, particularly in China, ticked lower. Continue reading
Fourth quarter earnings reporting season begins this week with about three dozen S&P 500 companies set to report results. The action kicked off this morning with Citigroup’s numbers, which will be followed by several other major banks later in the week, as well as a smattering of results from some consumer and industrial companies. So what does corporate America have in store for us?
Weak Chinese trade data, the unofficial kickoff of fourth quarter earnings season, and the ongoing government shutdown are on investors radars this morning. Continue reading
Rebound continues on trade talk optimism, Fedspeak
US: S&P 500 Index +2.54%, Dow +2.43%, Nasdaq +3.45%
Europe: STOXX Europe 600 +1.69%, German DAX +1.11% France CAC 40 +0.93%, U.K. FTSE 100 +1.18%
Asia: Japan Nikkei +4.08%, China Shanghai Composite +1.55%, Korea KOSPI 3.25%
Rates/Commodities: 10-Year Treasury yield +4 basis points to 2.70%, WTI crude oil +10.18%, COMEX gold: +0.34%
The S&P 500 Index is off to its best start in years, but this is on the heels of the worst year for stocks since 2008. The trifecta of crashing oil prices, confusion from the Federal Reserve (Fed), and trade issues with China all pushed equities lower by 14% during the usually bullish fourth quarter last year, and in the process made December the worst month of the year for the first time, according to data going back to 1950.