|Day's Range||76.18 - 81.07|
Markets performed well to start a new trading week, following two down-days to close out the previous week, on forward outlooks for coming quarterly earnings reports that appear fairly promising.
Yesterday I gave you all the reasons why a pullback in the S&P; 500 was likely, and today I’ll talk about the reasons why you should remain bullish.
The bull is telling us it wants to run, now that it’s becoming apparent that the bears are out of breath since their mid-July tech ambush.
Forecasts for what the rest of Q2 are emerging as more economic data becomes available. Head of Multi-Asset Strategy at Columbia Threadneedle Investments, Anwiti Bahuguna, joins The Final Round to discuss.
Brian Nick, Nuveen's Chief Investment Strategist, joins The Final Round panel to discuss what drove the day's market action as markets close with mixed results.
(Bloomberg) -- A breakneck rally across bond markets may slow as traders come to grips with the notion that the Federal Reserve’s support isn’t unconditional.After a torrid rally sparked by the Fed’s announcement in March that it would begin buying corporate debt, investment-grade bonds have stalled near record levels. A similar pattern holds true for high-yield markets, where spreads are broadly trading sideways after the asset class’s best returns in a decade brought them close to pre-pandemic levels. And the central bank’s oft-repeated commitment to keeping interest rates low have locked benchmark Treasury yields into an unrelenting range close to historic lows.The degree to which bond markets have rebounded after a trading freeze during March’s turmoil is largely the reason why they’re stalling out now. A parade of policy makers have hinted in recent weeks that the central bank won’t have to expand its balance sheet and buy bonds as aggressively as anticipated, with liquidity restored and primary markets buzzing. While bets the Fed isn’t going to be blindly buying bonds has capped gains for now, prospects that it might start again has cushioned any downside, according to Wells Fargo Investment Institute.“There has been a slight misunderstanding between the markets and the Fed,” said Sameer Samana, Wells Fargo Investment’s senior global market strategist. “What the Fed has basically said is: ‘Our goal is to make sure we have orderly and liquid markets.’ The market has taken that to mean, ‘Okay, we’re going to buy like there’s no tomorrow.’ If the market’s able to trade efficiently, the Fed is starting to see their job as mission accomplished.”After soaring 150 basis points in March, high-grade spreads tightened by 70 basis points in April and have dropped about 14 basis points so far in July through Friday. Junk-bond spreads have tightened 70 basis points this month, after a 380 basis-point surge amid March’s turmoil.Weekly figures published Thursday showed that the Fed’s balance sheet edged higher over the past week -- after falling for roughly a month -- but remained below $7 trillion. It exploded by $3 trillion from early March to mid-June as the central bank pumped liquidity into the financial system to keep credit flowing via short-term loans and bond buying.To be sure, there’s a reason ‘don’t fight the Fed’ is one of the most commonly deployed refrains in financial markets. The central bank has nearly unlimited firepower at its disposal to support the U.S. economy, the sheer magnitude of which was on display after the Fed slashed rates to near-zero and pumped trillions worth of liquidity into markets. Among the tools yet to be tapped are yield-curve control, an option that Federal Reserve Bank of New York President John Williams didn’t rule out in an interview Thursday.Now, markets are largely back to normal and policy makers see the balance sheet’s decline as a healthy sign. But that’s after the Fed’s late-March pledge to buy corporate debt set of a wave of front-running flows, with credit ETFs and mutual funds absorbing record amounts of cash. As analysts downsize their forecasts for the central bank’s balance-sheet growth, investors are assessing whether that was overkill.“People got a little bit carried away, were probably a little bit too positioned, and we forget that bonds often are kind of boring and we’re getting to that stage. If you want quick returns, it’s hard to see how you get them with some of these yields where they are,” said Peter Tchir, head of macro strategy at Academy Securities. “With investment grade and high-yield, you’re back to hoping you can clip a coupon rather than any big price appreciation.”The slimming-down of the balance sheet also helps explain why the equity market -- outside of the megatech stocks -- have hit a wall as well, according to Samana. While the S&P 500 has rebounded about 45% since March’s low to erase this year’s losses, the bulk of those gains came before early June, and are largely thanks to tech heavyweights pushing the index higher. In contrast, the small-cap Russell 2000 Index is still 12% lower year-to-date.“Equities haven’t really gone anywhere since early June, that dovetails nicely with the slowdown in the balance sheet,” Samana said. “It’s a very small sliver of the equity market that’s making all-time highs and its the part that not only benefits from what the Fed’s done, but also benefits from all the Covid-related things.”(Updates prices in 5th and 10th paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
John Grace, Founder and President of Investor’s Advantage Corp., joins The Final Round to highlight what bank earnings means for investors and his outlook for the second half of 2020.
Jul.15 -- Richard Bernstein Advisors Deputy CIO, Dan Suzuki, gives his thoughts on the end of the trading day. He joins Caroline Hyde, Taylor Riggs and Romaine Bostick on "Bloomberg Markets: The Close."
The three major averages finished higher on Wednesday, after a strong set of earnings results from companies such as Goldman Sachs and UnitedHealth before market open added to earlier hopes for a coronavirus vaccine after news from Moderna. The Dow Jones Industrial average and Russell 2000 both logged their sixth straight day of gains. The Final Round panel discusses the day’s market action.
Global Head of Equities at J.P. Morgan Private Bank Cayman Wills joins The Final Round to highlight the key themes that she is expecting to emerge in markets for the second half of 2020.
Jon Maier, Chief Investment Officer at Global X ETFs, joins The Final Round to highlight themes prevalent in markets and areas that investors should consider amid COVID-19 for growth.
In a Yahoo Finance Premium webinar, Brian Shannon, CMT discusses why trading legends missed the bulk of the post-Covid stock market rally and explains how traders can avoid common pitfalls, such as impulsive trading, by having a trading plan and knowing their time frame.
Stocks abruptly turned negative Thursday as fears over the economic outlook following an increase in coronavirus cases resurged. The Dow and S&P 500 wiped out their week to date gains, while the Nasdaq held higher and hit a record earlier in the morning.
The NSXUSD (Nasdaq 100 CFD) is a great alternative to trading the futures outright, which is why I like to use them to also gauge the risk of the broader U.S. stock markets.
Seyi Bucknor, Head of North America at Newton Investment Management, joins The Final Round to highlight investor opportunities, including emerging markets.
Stocks closed higher Wednesday as heavily weighed tech stocks continued their run of outperformance, with shares of Apple, Amazon, Netflix and Facebook hitting record highs. Earlier, a report underscoring ongoing US-China tensions and more advances in coronavirus case counts dragged on the S&P 500 and Dow.
Avenue Capital Group CEO and legendary investor, Marc Lasry, joins 'Influencers with Andy Serwer' to discuss the pandemic's impact on the global economy.
Ben Kirby, Co-Head of Investments at Thornburg Investments, joins The Final Round to highlight recent market action and what is driving investors.