The companies count. Stocks closed mixed yesterday, reminding investors that individual company risk is a thing. All eyes are turned east as the G-20 begins in Japan and many are hoping for something big.
MY TWO CENTS
- Which way is the exit. The entertainment event of the month began yesterday in Osaka Japan. That event would be the G-20 in which Trump will finally meet Xi to discuss trade. Both are due to meet on Saturday and hopefully forge a path out of this messy trade war that began with tariffs and trade imbalance but quickly escalated into discussions of intellectual property policy and national security. Though it is not clear how the largest part of the dispute can be resolved, the markets are cautiously betting that something positive will come out of the summit. Many traders are waking up to news the President shared WHILE YOU SLEPT in which he said we can expect “very big” trade deals with India and Japan. That can be interpreted as his attempt to preempt a bad response to a no-deal with China. Meanwhile President XI met with other world leaders WHILE YOU SLEPT and spoke out against “bullying practices” and protectionism. Any idea who he may be referring to?
- More signs on the economy. Yesterday’s GDP number reflected quarter over quarter economic growth at +3.1% annualized, which is in line with prior estimate but slightly lower than expectations. Personal Consumption came in under expectations, growing just +0.9, which can be some cause for concern as it makes up the bulk of economic growth. The Kansas City Fed released its Regional Manufacturing Sector Sentiment yesterday and it came in at 0, down 4 points from last month’s reading. The index has not been this low since November of 2016, indicating that tariffs are having a negative impact on the region. The indicator is part of a growing number of regional Fed reports that are registering a slowdown in business activity in recent months.
Stocks had a mixed close yesterday as positive sentiment on trade propped up some indexes, while trouble for Boeing held the Dow Jones back. The Financial sector led the S&P 500 up by +0.38% as traders awaited the results of the Fed’s annual bank stress test, expecting good results. Traders bets paid off as the Fed passed all but one bank, which prompted many of them to announce increases in dividends and stock buyback programs, WHILE YOU SLEPT. News that Boeing has identified more software problems with its grounded 737 Max jets caused its shares to fall, pulling the Dow Jones Industrial Average down by -0.4%. The small cap Russell 2000 rose by +1.9% and the NASDAQ 100 climbed by +0.39%. Bonds climbed and 10-year treasury yields pulled back by -3 basis points to 2.01%.
– Personal Income is expected to have risen by +0.3% compared to last month’s +0.5% while Personal Spending is expected to have grown by +0.5% compared to last month’s +0.3% growth.
– The Personal Consumption Expenditures (PCE) Deflator, the Fed’s top gauge for inflation, is expected to be at 1.5% year over year, and the core PCE deflator is expected to be 1.6%, well below the Fed’s 2.0% target.
– The University of Michigan final read on sentiment is expected to come in at 97.1, down slightly from last month.
– San Francisco Fed President Mary Daly will speak.
– Constellation brands will release earnings today.
– In next week’s abridged session we will get manufacturing PMI’s, more reads on durable goods, and the monthly employment situation.
Have a great weekend!
Muriel Siebert & Co., Inc. is an affiliated broker/dealer of the public holding company, Siebert Financial Corporation, which also owns Siebert AdvisorNXT, Inc. Siebert AdvisorNXT, Inc. is a registered investments advisor (RIA) with the SEC and with state securities regulators. We may only transact business or render personal investment advice in states where we are registered, filed notice or otherwise excluded or exempted from registration requirements. Investment Advisor products are NOT insured by the FDIC, SIPC any federal government agency or Siebert’s parent company or affiliates.
You are being provided this Market Note for general informational purposes only. It is not intended to predict or guarantee the future performance of any security, market sector or the markets generally. This Market Note does not describe our investment services, recommendations or market timing nor does it constitute an offer to sell or any solicitation to buy. All investors are advised to conduct their own independent research before making a purchase decision. This Market Note is to provide general investment education and you are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate for you based on certain investment objectives and financial situation. Do not use the information contained in this email as a basis for investment decisions. You should always consult your investment advisor and tax professional regarding your investment situation before investing. The charts and graphs are obtained from sources believed to be reliable however Siebert AdvisorNXT does not warrant or guarantee the accuracy of the information. Any retransmission, dissemination or other use of this email is prohibited. If you are not the intended recipient, delete the email from your system and contact the sender. This is a market commentary, not research under FINRA Rule 2210 (b)(1)(D)(iii) and FINRA Rule 2210 (c)(7)(C).
© 2020 Siebert AdvisorNXT All rights reserved.