|Day's Range||2,973.09 - 2,998.28|
|52 Week Range||2,346.58 - 3,017.80|
Earnings season is underway and corporate buybacks are set to boost earnings per share for S&P 500 companies.
(Bloomberg) -- U.S. stocks rebounded and the dollar fell after Federal Reserve Bank of New York President John Williams highlighted the need for swift action should policy makers conclude the economy is in trouble.Consumer and financial stocks led gains in the S&P 500 Index, while Treasury 10-year yields dropped. A positive outlook from Apple Inc. supplier’s Taiwan Semiconductor Manufacturing Co.’s lifted chipmakers. The NYSE FANG+ Index slid on Netflix Inc.’s surprise loss of U.S. customers. A report that Iran made a “substantial” offer on its nuclear program in return for fewer sanctions gave a lift to equities that was later tempered by news that the U.S. shot down an Iranian drone. In after-hours trading, Microsoft Corp. and CrowdStrike Holdings Inc. rallied after sales topped estimates.The futures market edged closer to the idea of a half-point U.S. rate cut this month, with fed funds now pricing in about 42 basis points of easing. Fed Vice Chairman Richard Clarida told Fox Business Network that policy makers shouldn’t wait for the economy to turn down to act. Cutting rates could help cushion some of the blow from uncertainty about trade that’s likely to prove persistent, according to Fed Bank of St. Louis President James Bullard.“We’re in a trade war, you’re seeing the impact on corporate earnings, you’re seeing the central banks forced to scramble to react to that,” Bob Michele, CIO and head of global fixed income at JPMorgan Asset Management, said in a Bloomberg TV interview.Elsewhere, oil slid to the lowest in almost a month as pessimism about a trade truce between the U.S. and China continued to dog markets, while the resumption of Russian pipeline flows fed worries about a supply glut. The pound climbed as the British Parliament backed measures to prevent the next prime minister suspending the legislature to pursue a no-deal Brexit.These are the main moves in markets:StocksThe S&P 500 rose 0.4% to 2,995.11 as of 4 p.m. New York time.The Stoxx Europe 600 Index decreased 0.2%.The MSCI Asia Pacific Index fell 0.6%.CurrenciesThe Bloomberg Dollar Spot Index dipped 0.5%.The euro gained 0.5% to $1.1276.The British pound climbed 1% to $1.2554.The Japanese yen added 0.6% to 107.26 per dollar.BondsThe yield on 10-year Treasuries dipped two basis points to 2.03%.Germany’s 10-year yield declined two basis points to -0.31%.Britain’s 10-year yield was unchanged at 0.759%.CommoditiesThe Bloomberg Commodity Index dipped 0.8%.West Texas Intermediate crude declined 2.6% to $55.30 a barrel.\--With assistance from Nancy Moran, Sophie Caronello, Todd White, Yakob Peterseil, Cecile Gutscher, Tom Keene, Nejra Cehic, Adam Haigh and Vildana Hajric.To contact the reporter on this story: Rita Nazareth in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Williams finished by saying that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.”
“Take swift action” and “keep interest rates lower for longer” may mean to some that a 25-basis point rate cut is a done deal, but to others it means “be aggressive”. Therefore, I have to conclude that the chances of a half-a-point rate cut may increase over the near-term, which could be supportive for gold prices.
Investing.com – Stocks ended the day flat Thursday, after paring the bulk of losses as growing expectations for aggressive Federal Reserve easing lifted sentiment following mixed corporate earnings.
Wall Street's main indexes were set for their third day of losses on Thursday, as Netflix reported a surprise fall in U.S. subscribers in a downbeat start to results from high-growth companies. Losses in Netflix triggered a 1.58% fall in the communication services sector, one of the best-performing S&P sectors so far this year. As second-quarter earnings rolled in this week, the three main Wall Street indexes retreated slightly from record highs and are set for their steepest weekly fall in seven weeks.
The stock markets rally just a bit early during the trading session on Thursday, recovering a little bit of the loss that we have expense over the last several sessions.
Financial conditions are crucial for economic activity because they often dictate the spending, saving and investment plans of businesses and families and an index (FCI) compiled by Goldman Sachs suggests an improving picture since the start of 2019 in the United States and worldwide. "Since June, financial conditions have been easing and in the United States they are back where they were at the start of the fourth quarter," said Sven Jari Stehn, head of Europe economics at Goldman Sachs. The easing was precipitated by the U.S. Federal Reserve's dovish pivot in January and while an escalation in Sino-U.S. trade tensions briefly sent the index higher in May, conditions loosened again in June as the Fed and European Central Bank re-ignited equity and bond market rallies by flagging rate cuts.
Investing.com – Wall Street fell on Thursday as Netflix (NASDAQ:NFLX) struck a bitter note to start the tech sector's earnings season.
U.S. stock indexes edged lower on Thursday as investors awaited more developments around trade, while Netflix posted a surprise drop in U.S. subscribers, kicking off earnings for the FAANG group of stocks on a sour note. Losses in Netflix also dragged the communication services sector, one of the best-performing S&P sectors so far this year, 1.20% lower. "Netflix did nothing to soothe investor concerns around what earnings prospects are likely to unfold over the next couple of weeks," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Based on the early price action and the current price at 2982.50, the direction of the S&P; 500 Index the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at 2986.50.
(Bloomberg) -- A hedge fund that’s delivered almost double the returns of the S&P 500 Index this year is going all-in on stocks -- at least the safe and stodgy ones.Valley Forge Capital Management, whose $460 million of assets is invested in just nine stocks, has cut its cash holdings to 1%, the lowest in seven years and compared with an average 20% in the fund’s history, according to founder Dev Kantesaria.In a paradox characteristic of the late-cycle rally, Kantesaria is bullish on equities but bearish on the economic outlook. While he reckons a sustained low-rate environment makes stocks look “exceedingly cheap” now, he’s betting big on companies so entrenched and conservative that they’re insulated from economic swings.“It is possible that we have here in the U.S. a 10- or 20-year period where interest rates could remain quite low as the Fed tries to spur growth and employment,” he said from Wayne, Pennsylvania. “The ideal type of company that you want to own is a company that has strong organic growth and predictable earnings -- essentially a high-quality bond that’s yielding a good amount today and will continue increasing its yield going forward.”Owning quality stocks is a popular strategy at this point in the economic cycle -- beloved for its supposed ability to ride on buoyant equity markets even through slower growth. While investors have come to count on global central banks almost as downside insurance, it’s clear global economic expansion is not accelerating. And beyond the near term, structural changes in the economy, including an aging population, are fueling fears of a secular slowdown.Valley Forge Capital is up 34% this year through June, nearly double the S&P 500’s total return, and has gained 400% since its 2007 inception, according to a person familiar with the matter who asked not to be identified because the information is private.Chasing the stock rally while fretting about the economy is especially in vogue now. A Bank of America Corp. survey of fund managers overseeing a total of nearly $500 billion showed investors are adding equities and cutting cash this month. At the same time, the percentage that saw the business cycle as a risk to market stability reached nearly 73%, the highest in eight years.The S&P 500 dropped for a third day on concern profit growth is slowing and the U.S.-China trade conflict has come no closer to a resolution.That environment dovetails with Valley Forge Capital’s conservatism. The fund favors large companies with strong pricing power, growing earnings, a reliable outlook and little need for capital re-investment. In Kantesaria’s books, the stocks that fit the bill include Visa Inc., Intuit Inc., Autodesk Inc., Fair Isaac Corp. and Moody’s Corp.With a concentrated portfolio, he has a lot riding on that handful of stocks. It’s a strategy more active investors are adopting to prove their mettle against passive funds coasting on high-flying equity benchmarks. To some, that promises better odds of beating indexes -- though the loss of diversification might also mean wilder swings.“It is the only way to invest and have any chance of outperforming the broader market,” he said. “By the time you own 25 or 30 stocks or more, you’re not investing in wonderful businesses anymore.”That selectivity means even the tech giants -- revered for their dominance and profit growth -- are too aggressive in re-investing cash for the 46-year-old, who studied to be a doctor at Harvard and worked in venture capital before he founded the hedge fund in 2007. (His fund has a 0.4% position in Amazon.com Inc.)The common gripe is stocks with such prized qualities are already richly valued. U.S. companies with fast earnings growth have been extending a record high versus the overall market almost every day of late, according to MSCI indexes. Ditto for a Goldman Sachs Group Inc. basket of high-quality shares.Kantesaria’s trick is to go for the dullest names. Being in the suburbs of Philadelphia rather than a few blocks away from Wall Street helps, he reckons.“Telling someone about the business model of Moody’s is like watching paint dry,” he quipped. “No one is talking about these companies.”(Updates charts and adds market move in paragraph under first chart.)To contact the reporter on this story: Justina Lee in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Blaise Robinson at email@example.com, Namitha Jagadeesh, John ViljoenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. stocks moved higher on Thursday after a slow start as comments from New York Fed President John Williams helped cement expectations for an interest rate cut from the U.S. central bank at the end of the month. Williams said that when rates and inflation are low, policymakers cannot afford to keep their "powder dry" and wait for potential economic problems to materialise. "He's toeing the party line at the Fed, basically implying that an insurance rate cut is the right thing to do for the economy at this point in time," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
U.S. stock futures slipped on Thursday after streaming pioneer Netflix posted its first drop in U.S. subscribers since 2011, kicking off earnings for the so-called FANG group on a sour note. Netflix Inc sank 11.2% premarket as it also missed targets for new subscribers overseas at a time when it has staked its future on global expansion. "The failure of Netflix to meet its already low subscriber target will hit sentiment.
There seems little doubt that if inflation expectations resume a trend lower, then the need for an aggressive response from the Federal Reserve increases and this will have a greater effect on rate cut expectations, bond yields, the USD, equities and gold.
Our researchers identified this critical Double-Top pattern in the Transportation Index after a very strong price rally on Friday, July 12.
A gauge of global stocks advanced on Thursday, erasing declines on a late rally after comments from a U.S. Federal Reserve policymaker heightened expectations for a rate cut, while oil prices dropped on forecasts of rising output. In a speech read as a strong argument in favour of quick and aggressive action by the Fed to cut rates this month, New York Fed President John Williams said policymakers need to add stimulus early to deal with too-low inflation when rates are near zero. "In all the Fed speak we’ve had... it seems like the ones that are more interested in cutting are more visible," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.
The S&P; 500 went back and forth during the trading session, so at this point it’s likely that the volatility will continue as the markets are looking for some type of directionality at the youth historically important levels.