Daily Insights

Stocks rally. The S&P 500 Index gained 4.4% last week, its best week since November, on increasing hopes for Federal Reserve (Fed) rate cuts. Friday’s weaker-than-expected May jobs report sealed the deal for financial markets, as fed fund futures are now pricing in a 99% chance of a rate cut by the end of the year. A cut does look increasingly likely, but we believe that fed fund futures markets remain too aggressive given on-going fiscal stimulus, an economy that has been growing near 3%, and a near 50-year low in the unemployment rate. However, policy uncertainty remains the biggest risk to the economic outlook, and the bond market has increasingly signaled that monetary policy may be too tight for a drawn out trade dispute. Continue reading →

Daily Insights

U.S. markets rally midweek. Following modest declines the past 4 weeks, U.S. equities are poised to end this week sharply higher with the S&P 500 Index gaining 3.6% in the past 3 trading days alone. Continue reading →

Daily Insights

Trade negotiations with Mexico continue. Progress has been made but “not nearly enough” according to President Trump, setting up 5% tariffs on Mexican imports to go into effect on Monday. Talks continue today. Continue reading →

Daily Insights

ADP report well below consensus. Today’s Automatic Data Processing (ADP) employment report showed U.S. companies hired 27K workers in May, well below consensus estimates for a 185k increase and the prior reading of 271k. Continue reading →

Daily Insights

Stocks opened solidly higher on hopeful trade headlines. Several headlines are attracting bids from stock traders this morning. First, reports that Republican lawmakers may block Trump’s tariffs on Mexico. Continue reading →

Daily Insights

U.S. futures point to slightly lower open as trade jitters continue. Asian markets were higher overnight, helped by emerging markets, but European markets are point lower at mid-day, and S&P 500 Index futures are signaling a downward nudge at open for equities with continued pressure on the 10-year Treasury yield. Continue reading →

Daily Insights

Tariffs for Mexico. On Thursday night, President Trump said the U.S. will impose a 5% tariff on all imports from Mexico effective June 10. Continue reading →

Daily Insights

GDP’s first revision. Gross domestic product (GDP) rose 3.1% in the first quarter, according to the first revision, lower than the initial reading of 3.2%. Consumer spending’s contribution was revised up 0.1%, while net exports and inventories were revised down approximately 0.1%. However, business spending contribution to GDP was cut about 0.1%. Continue reading →

Daily Insights

China may weaponize rare earths. Reports from Chinese media suggest China may be considering weaponizing rare earths as a retaliatory measure in the U.S.-China trade dispute. Commentary in Chinese media included a Chinese phrase translating to “don’t say we didn’t warn you,” which is significant because it was used before the China-India and China-Vietnam conflicts. Continue reading →