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?
At the Market
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?
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?
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.
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.
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.
The S&P 500 Index had its best week in two months. All the averages made good gains and investor sentiment numbers are improving. We could see a return to the January highs before summer, unless something comes out of left field.
You would think an unemployment rate that hit 3.9% in April would have cheered the market. It was, after all, the lowest such rate in 18 years. But no, all eyes were focused on the first round of China/U.S. trade talks, which conclude today.
“Never a dull market,” could be the motto of choice to describe stock market performance year-to-date. This week, we need to add two more concerns to the market’s wall of worry.
Earnings season kicked off last Friday with the bank results. The numbers were stellar, but the stock prices of those companies fell hard. Since then, the same thing has occurred to any number of companies. What is going on?
As of Friday morning, the S&P 500 Index has erased all the losses of 2018. That is despite threats of conflict with both Syria and Russia, a potential tariff trade war and concerns over America’s exploding tax-cut-fueled national debt.
This week, our fearless leader upped the ante on the tariff tiff with China. It went like this: Trump announced his list. China announced theirs. And at the end of the week, the president sees them one better. Aside from the volatility it is causing in the stock markets, not much besides headlines has been accomplished.
It has been a tough month for stocks and February wasn’t much better. Granted, it was a small price to pay for last year’s great gains, but, as in life, all good things must come to an end. Will April bring more of the same for us or can we hope for something better?
World markets declined again this week. Despite world condemnation, which included most of America’s economists and corporations, Donald Trump unilaterally forged ahead in implementing his own brand of protectionism. Investors fear the consequences.