It’s the same old song. It has been playing over and over since the end of January. Higher interest rates, a stronger dollar, and, of course, the inevitable and meaningless stream of tweets from our Tweeter-in-Chief are keeping stocks range-bound. How long will this condition persist?
A Few Dollars More
Tariffs on $34 billion in Chinese imports were imposed, as expected, last week. China responded with $34 billion of their own tariffs on American imports. So far, this has been a zero-sum game. The question that investors are asking is whether or not the trade war will escalate.
While the stock markets meander through this sultry summer, bond investors are glued to the yield curve. What, you might ask, is the yield curve?
It’s been over ninety degrees for days. If you are like most of us, it’s a bit harder to give it your all at work, even if you have an air-conditioned office job. Now imagine the same thing happening to millions of workers all over the nation.
There was nothing to see in the markets this week, simply more of the same crisis news that may keep the media happy, but no one else. Tariffs and trade remain in the forefront and will continue to do so. What should investors do?
What’s up with the dollar? The greenback is strengthening and is having its best quarter since 2016 against an array of foreign currencies. Is this an accident, or is it something far more dangerous?
Over half the economists on Wall Street believe that by the end of 2020 we will experience our first economic downturn in years. If so, when might you begin to prepare for a rocky two-year period for all of us?
The world is in turmoil. The news is all bad. Trump is threatening to up the ante on tariffs. NAFTA is kaput. Our trade partners hate us. China won’t back down and, if you have time to spare, you are reading about immigrant kids locked in Texas dog cages by order of the president. So why is the stock market holding up?
Investors waited all week for President Trump’s verdict. On Friday, he did not disappoint his followers. He decided to move ahead with plans to slap $34 billion in tariffs on Chinese imports. Stock markets worldwide fell on the news as investors await a Chinese response.
“Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!” Statue of Liberty poem
Over the weekend, the G-7 group of nations met to denounce the recent actions of the United States. This coming Friday, these same leaders convene in Quebec. President Trump will attend and seems determined to face them down.
The markets are approaching this year’s half-way mark and investors have little to show for it. The averages are fluctuating between flat and up 1-2%. This sideways action is bullish, given the wall of worries that investors face.
As the month wound down, so did stocks. Pronouncements from Washington dominated the market’s direction on a daily basis. We can expect to see that trend continue as the summer doldrums reduce liquidity and exaggerate market swings.
A political crisis in the fourth largest economy in Europe has spilled over into the financial markets. Global stock exchanges greeted Italy’s present political dysfunction by registering major declines–and the crisis may just be getting started.
Most indexes ended the week where they started. While day traders may have lost or gained from intraday moves, serious investors simply ignored the constant and contradictory stream of news coming out of Washington.
Back in the day, money managers were revered. News stories spotlighting the year’s “hottest hands,” or that hedge fund’s rising star were all the rage. Retail investors chased performance and paid for it. But times are changing, and simply beating the market for a year or two fails to impress most investors.