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November 30, 2018

G20 Summit Begins After Days of Speculation

 

Market Action Muted as G20 Summit Begins

Market pundits were speculating today that President Donald Trump and Chinese President Xi Jinping could agree on a framework to move trade negotiations forward during this weekend’s G20 summit. The proposed negotiation framework would pause any additional tariffs while the world’s two leading economies negotiate trade terms. Such an agreement would mean a significant rally in risk assets, but despite an absence of any official announcement, equity markets still grinded higher, with the S&P 500 and Dow Jones...

November 29, 2018

Economic Uncertainty Builds as Consumer Spending Rises, Inflation Cools

 

Equities Move Sideways, Volatility Remains High

Investors continued to digest a whirlwind of trade and geopolitical headlines during today’s volatile session. President Trump cancelled his meeting with Vladimir Putin at the G20 summit after Russian forces seized 24 Ukrainian sailors off the coast of Crimea.  Speculation also increased that a trade deal may soon be reached between the U.S. and China, but we’ll have to wait until at least the dinner between President Trump and Chinese President Xi Jingping tomorrow night.  While equity markets didn’t react...

November 28, 2018

Commentary on "Neutral Rate" Rattles Financial Markets

 

Powell Comments Push Risk Assets Higher, Rates Lower

Federal Reserve Chairman Jerome Powell’s comments that rates are “just below the neutral range” led to an equity rally (S&P +2.30%) as investors interpreted that to mean that the Federal Reserve will slow their rate of hikes in 2019. In spite of his comments, and the market reaction, Chairman Powell still emphasized that US monetary policy is not on a “preset” path- yet another reminder that predicting rate hikes far into 2019 could be quite challenging. Near-term, the market continues to price in an...

November 27, 2018

Risk Assets Rally Despite Geopolitical, Fed Uncertainty

 

Fed Sees Inflation Below Target, Increasing Uncertainty on Rate Hikes

The uncertainty about the pace of rate hikes next year remains after Federal Reserve Vice Chairman Richard Clarida suggested today that inflation may be running below the Fed’s target. The Vice Chair’s comments reveal the Federal Reserve’s desire to remain data dependent and non-committal as to future hikes, and signal a renewed effort to ween markets off the “forward guidance” that previous Fed leadership used to telegraph policy decisions. This apparent new Fed stance is likely to keep...

November 26, 2018

Retailers Rise as Holiday Season Kicks Off

 

Risk Assets Bounce Back, Unconvincingly

With record sales expected to be reported to have taken place on Black Friday and Cyber Monday, retailers led the move up for both the S&P 500 (+1.55%) and the Dow Jones Industrial Average (+1.46%), while tech shares rebounded from last week’s plunge and assisted in leading the Nasdaq +2.06%.  The price action came on below-average volume however, with the S&P trading 18% fewer shares today than average - signaling this may be a weak rally after a prolonged stretch of negative days.  Treasury yields/swap rates...

November 23, 2018

Market Pessimism Outweighs Black Friday Exuberance

 

The Slippery Slope for Crude​

There was no holiday spirit to be felt in energy markets...

November 21, 2018

Risk Assets Gobble Up Gains Heading into Thanksgiving

 

Equities Rebound Heading into Holiday

Stocks markets had something extra to be thankful for as they bounced back from the basting they had endured over the past few sessions, with the tech-heavy Nasdaq leading the way with a 0.92% rise while the S&P 500 (+0.31%) posted a more modest gain.  The risk-on sentiment endured a weak business investment report from the Commerce Department which displayed durable goods orders declining 4.4% in October- its largest drop since July 2017.  Also adding to the growing list of fundamental economic indicators that...

November 20, 2018

Risk Assets Continue to Feel the Pain

 

Tech Stocks Pull S&P 500 into Negative Territory on the Year

The S&P 500 was down over 1% at the open and kept grinding lower- ending the day down 1.82%. The sell-off was led by technology stocks, echoing the theme of the past few sessions. Unlike last week, the VIX or “Fear Gauge” did respond to the move in cash equity markets, moving up 2.5 points to 22.72- its highest close of the month.  The VIX has now spent three and a half months above 16 in 2018, after momentarily peaking at that level in 2017.

 

November 19, 2018

Risk Off Mood Grips Markets to Start the Week

 

Equity Markets Plunge

The S&P 500 began the holiday-shortened week by dropping 1.66%, resulting in 38% of the index’s names now trading in bear market territory. The selloff was led by Apple, the tech giant falling 3.96%, as the company is reported to have slashed its iPhone production plans by as much as 1/3 of the 70 million units expected between September and February. Some of biggest news in equity markets came from overseas- with Nissan Chairman / Renault CEO Carlos Ghosn being arrested in Japan for financial misconduct. Nissan’s stock traded down...

November 16, 2018

Yields Trend Lower Despite Trade Optimism

 

All Hope is Not Lost

Today President Trump expressed optimism at the prospect of a trade resolution with China as he commented on the most recent trade offer sent by the Chinese government earlier this week.  “It's a pretty complete list, a lot of the things we asked for, but there are four or five things left off," said Trump, "we'll probably get them, too. But as you know it's a very complete list."   The document from China included 142 items, broken into three categories – 1) issues to be negotiated further 2) negotiations already in the works and 3)...

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