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November 15, 2018

More Market Volatility with Heightened Brexit Uncertainty


DisMAY in the UK

Political turmoil in the UK rattled global financial markets as British Prime Minister Theresa May received the resignations of six government ministers who were unhappy with the recently presented terms of the nation’s departure from the European Union.  Reports have stated that members within Theresa May’s Conservative Party have even been plotting to activate a no-confidence vote to try and sway their PM to restructure the agreement.  Much of the dissatisfaction with the current deal relates to the fact that the UK would remain closely...

November 14, 2018

Inflation Data Meets Expectations, Crude Selloff Finally Takes Break


October’s US Consumer Price Index was reported in line with expectations with a 0.3% increase month over month (+0.2% core) – and as such is still trending higher but does not seem to be indicative of accelerating inflation.  Compared to a year earlier, headline CPI climbed 2.5% while core CPI rose 2.1% and remained firm above the Fed’s 2% target.


November 13, 2018

Crude Oil Extends Record-Long Selloff


Despite a promising start to the session, the S&P 500 (along with other major indices) ended in negative territory for the day:


November 9, 2018

Crude Oil Selloff Weighs on Risk Assets


Crude Slide Continues, Bleeds into Equities

All major US equity indices finished in the red today, with the tech-heavy Nasdaq faring the worst as it declined 1.65%.  Overall, stocks remained positive on the week despite US crude’s fall down to its lowest level since February.  WTI futures sold off for a tenth consecutive session, its longest losing streak in the past 34 years, sliding 0.8% to $60.20/barrel.  All eyes will be on the OPEC meeting this weekend, as market participants closely monitor what could be a contentious meeting between Saudi Arabia and...

November 8, 2018

Fed Holds Rates Steady, Reinforces Robust Economy


Fed Maintains Plan for Future Hikes

Today the Fed concluded its two-day policy meeting with the unanimous decision to leave benchmark borrowing rates unchanged at a target range of 2.00%-2.25%, as expected.  While there was no press conference at the conclusion of the meeting (to change going forward) or updated Fed dot plot, the FOMC statement released afterwards reflected a sense of shared optimism amongst the Fed members with regard to the current state of the US economy:

  • Household spending continuing to grow strongly

  • ...

November 7, 2018

Risk Assets Rise as Midterm Elections Wrap Up

Equities Celebrate End of Midterm Election Uncertainty

There were a number of notable themes to emerge from yesterday’s election results ,which ultimately led to a split Congress as financial markets had anticipated:

  • Democrats seized control of the House of Representatives – will now have a 9-seat advantage

  • Republicans expanded their majority in the Senate - went from a 2-seat to 6-seat advantage

  • A record number of women were elected to the House - at least 89

  • The first two Muslim women were...

November 6, 2018

US Elections Take Center Stage in Global Financial Markets


Midterm Elections Temper Equity Markets

Trading volumes in stocks were thinner than usual today as equity investors exhibited caution with the commencement of midterm elections.  While the expectation is for Republicans to retain control of the Senate and cede the majority in the House of Representatives, effectively creating a gridlock for the passing of new policies, there always remains the potential for a surprise (see US presidential election of 2016).  All three major equity indices posted steady gains of roughly 0.65%, while US Treasurys experienced...

November 5, 2018

Financial Markets Mixed Ahead of Midterm Elections, Iran Sanctions


Stocks Mixed to Open Week

Major US equity indices were mixed on the day as strength in the financial and energy sectors helped to offset a slide in technology stocks.  The DJIA (+0.76%) and S&P 500 (+0.56%) posted modest gains while the Nasdaq finished 0.38% in the red, heavily weighed down by a 2.8% drop in shares of Apple.  Overall, investors displayed a sense of caution ahead of tomorrow’s midterms elections, where probabilities currently point towards a split Congress – a result that would make it more difficult for the Trump administration to push...

November 2, 2018

Yields Surge After Robust Jobs Report


Employment Data Impresses

The Labor Department’s nonfarm payrolls report released this morning provided a number of highlights in support of a booming US economy-
250k Nonfarm payroll additions: A solid rebound from September’s downwardly revised +118k figure that was impacted by Hurricane Florence.  The strongest performing sectors included manufacturing (+32k) and professional & business services (+35k).  Payroll growth in the US has totaled 2.1 million year-to-date, the third fastest pace over such a time dating...

November 1, 2018

Trade Concerns Ease, Boost Risk Assets


More Trade Positivity

For the second time this week trade negotiations between the US and China were regarded with a bit more optimism.  Today’s positivity followed a direct conversation between President Trump and Chinese President Xi Jinping, the first such occurrence in several months:
Trump’s tweet- “Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade.  Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina...


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