Daily Insights
Stocks opened sharply amid falling rates, trade fears. The People’s Bank of China set its yuan target just a hair stronger than 7 per dollar, a relief to those worried about the psychologically significant round number, but weaker than some had anticipated. Continue reading
Daily Insights
China trade retaliation extends sell-off. The S&P 500 Index declined 3%, its worst day of 2019, after China retaliated against new tariffs on Chinese goods announced by the Trump administration last week. Continue reading
Daily Insights
Stocks down sharply on latest trade escalation. The S&P 500 Index is down about 1.5% this morning after the latest tariff threat from President Trump was followed by reports of China pulling prior commitments to purchase U.S. agriculture goods. Continue reading
Daily Insights
Volatile week following Fed and tariff announcements. The S&P 500 Index has had a rocky week so far, on track for the largest weekly decline since May. We’re currently monitoring the 2,972 level as a first area to find support, which would be a 5% retracement of the January 2018 high. Continue reading
Daily Insights
Fed cuts rates. The Federal Reserve (Fed) announced yesterday it would reduce its policy rate by 25 basis points (0.25%), the first rate cut since the financial crisis. The Fed also said it would end its asset sales on August 1, instead of in October (as previously planned) in order to align its balance sheet and rate policies. Continue reading
Daily Insights
Stocks open higher on Fed day. Apple’s well-received earnings report is helping boost market sentiment this morning, but the Federal Reserve (Fed) is taking center stage. A 25 basis point (0.25%) cut is fully priced in–and is our expectation–but the bond market is suggesting a slight chance of a bigger cut. Continue reading
Daily Insights
Stocks open lower as trade hopes diminish. Already low expectations for a breakthrough in U.S.-China trade talks in Shanghai this week are falling further this morning. President Trump called out the Chinese for dragging their feet on prior commitments to purchase U.S. agricultural products, bringing a combative tone to the start of the latest round of face-to-face meetings. Meanwhile Trump administration trade officials called out Vietnam for its trade surplus with the United States. Besides trade talks, market participants will be focused on the start of the Federal Reserve’s (Fed) policy meeting today and another batch of earnings results. Continue reading
Daily Insights
Good earnings season overall, with a caveat. A large loss from aerospace giant Boeing prevented S&P 500 Index earnings from improving last week as earnings season rolled on. Overall index earnings are tracking at a 2.6% year-over-year decline (source: FactSet), in line with June 30 consensus estimates. However, 77% of S&P 500 companies have beaten estimates, which is excellent, especially considering tariff costs and ongoing trade uncertainty, slowing global growth, and a strong U.S. dollar. Excluding Boeing’s results, we think the chances are good that second quarter earnings end up growing when all results are in. Continue reading
Daily Insights
Stocks rise after GDP, tech earnings. U.S. stocks are slightly higher this morning following better-than-expected gross domestic product (GDP) data and a busy afternoon yesterday with earnings reports from tech giants. Amazon and Google’s results effectively offset each other, with Amazon disappointing versus expectations but Google beating. Earnings season continues to tilt positive, but the market reaction to fundamentals may become more muted as concerns about trade uncertainty and global growth persist. Continue reading
Daily Insights
ECB talks potential cuts as Eurozone slowdown deepens. The European Central Bank (ECB) signaled added monetary policy support is likely on the way following the conclusion of its latest policy meeting this morning. While a new round of bond purchases, known as “quantitative easing,” was expected, new language was also added to the policy statement that rates would be held at “the present level or lower,” signaling an increased likelihood of a rate cut into negative territory in September. Recent data confirmed a deepening slowdown in the Eurozone economy at the same time that risk of a no-deal Brexit increased with the installation of Boris Johnson as the United Kingdom’s new prime minister. Continue reading