^DJI - Dow Jones Industrial Average
| Previous close | 27,182.40 |
| Open | 27,216.67 |
| Volume | 255,255,186 |
| Day's range | 27,193.95 - 27,277.55 |
| 52-week range | 21,712.53 - 27,398.68 |
| Avg. volume | 296,137,301 |
- Bloomberg
Stock Bulls Betting on Rate Cuts Are a Long Way From Sure Thing
(Bloomberg) -- Another rate cut from the Federal Reserve is all but certain. Its impact on the stock market, however, is the topic of frantic debate.In the bear camp are Bank of America Corp. and Morgan Stanley, whose strategists warned against relying too much on lower rates to boost stocks. In separate research, they reached the same conclusion after studying the historic relationship between Treasury yields and the S&P 500’s price-earnings ratios. That is, when rates go down too much, it hurts equity valuations.Ned Davis Research, on the other hand, offered a brighter assessment by focusing on a favorable market pattern following the second rate cut of a cycle, as is the case now.Getting it right has become an urgent matter for investors who have watched the S&P 500 rally 20% this year, with almost all the gains coming from an expansion in price multiples. Profits are barely growing, but stocks have rebounded from last year’s selloff after the Fed put a brake on rate hikes.Rate cuts can clearly bolster stocks in some circumstances. When they don’t is when the economy is in trouble -- and easy monetary policy almost always comes at times of trouble. When yields undercut a certain threshold, Morgan Stanley and BofA pointed out, equity multiples tend to shrink.“You can’t just depend on the Fed to lower interest rates to spur this bull market further,” Rich Weiss, chief investment officer of multi-asset strategies at American Century Investments in Mountain View, California, said by phone. “The fundamentals have to be there for additional highs on the stock market. They just aren’t there.”BofA and Morgan Stanley found different yield levels that historically switched from being good to bad for valuations. Savita Subramanian at BofA pointed to 10-year Treasury yields below 4%, compared with the current level around 1.9%. Mark Cabana, the firm’s rate strategist, said in a note earlier this month that the market expects the Fed to lower interest rates about five times by early 2021 and the likelihood for zero or negative interest rates is rising.“An ultra-low or negative rate environment is not necessarily supportive of stocks,” Subramanian wrote in a note last week. “The path to 0% would be accompanied by a significant deterioration in the growth outlook. That doesn’t bode well for P/E multiples.”Look at Germany, she suggested. Yields on the country’s 10-year bund have slipped to minus 0.7% from 4.9% since 2010. And price-earnings multiples for the stock market have been flat, hovering near 13.At Morgan Stanley, Mike Wilson examined real yields, the extra payment from 10-year Treasury above inflation. Currently, they sit in a range between minus 0.5% and zero, a place where further drops historically entail a decline in P/Es.“Falling rates are only a positive for equity valuations to a point,” said Wilson. “We’re passing the point.”Consider the last rate cut, he said. When the Fed lowered rates for the first time in a decade on July 31, the S&P 500 dropped 1.1% and then continued to decline the following month. At Friday’s close just above 3,000, the equity benchmark wasn’t far from the level seen the day before the rate move.But a second rate cut has tended to herald a more favorable reaction from stocks than the first, according to Ned Davis Research, which studied market performance and easing cycles in the past century.Perhaps it’s because doubts about the Fed’s commitment ease, or liquidity from the first one works through the system. Whatever the reason, the Dow Jones Industrial Average has jumped an average 9.7% three months after the second cut.“The good news for the bulls, from a historical perspective, is that a reduction next week would mean that a one-and-done cut is off the table,” Ed Clissold, chief U.S. strategist at Ned Davis, wrote in a note last week. “Two is better than one.”To Kevin Miller, chief investment office at E-Valuator Funds, the Fed’s influence on the U.S. market has weakened after Chairman Jerome Powell started considering global developments in policy making.“He doesn’t have to do something for the economy, but he does have to keep an eye on what’s happening globally and stay somewhere in line with where global rates are,” he said. “I don’t see a huge sell-off in the market if they lower by a quarter. Likewise, I don’t see a huge gain. It’s going to be more driven by what we’re hearing on a potential trade agreement” between the U.S. and China, he added.To contact the reporters on this story: Tatiana Darie in New York at tdarie1@bloomberg.net;Lu Wang in New York at lwang8@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
The Week Ahead – Brexit, the BoE and the FED are in Focus
It’s a big week ahead for the markets. The FED, the BoE and Brexit are in focus, with stats and chatter on trade also needing some attention.
- FX Empire
US Stock Market Overview – Stock Close Mixed Despite Robust Retail Sales Report
Consumer sentiment rises more than expected
- Reuters - UK Focus
US STOCKS-Wall Street mixed as trade hopes capped by Apple drop
Wall Street was mixed on Friday, with the S&P 500 and the Dow hovering just below all-time highs as cautious optimism regarding easing U.S.-China trade tensions was held in check by a drop in Apple stock. Tariff-vulnerable industrials helped keep the blue chip Dow in positive territory, which was on track for its eighth straight daily advance, its longest winning streak since May 2018.
- Investing.com
Stocks – Market Ends Mixed; September Looks Bullish for Wall Street
Investing.com - Stocks finished the day little changed, but that might be good news.
- Reuters
Apple, Broadcom hold back Wall Street gains
Broadcom Inc, among the world's biggest chipmakers, weighed on the tech-heavy Nasdaq after it said in results late on Thursday that demand for microchips had bottomed out and that a recovery was not yet on the cards.
- Reuters - UK Focus
US STOCKS-Apple, Broadcom hold back Wall Street gains
Losses for U.S. technology majors Apple and Broadcom overturned early gains on Wall Street on Friday, as traders balanced the latest indicators on an uncertain global growth outlook with perceived progress in reducing Sino-U.S. trade tensions. Broadcom Inc, among the world's biggest chipmakers, weighed on the tech-heavy Nasdaq after it said in results late on Thursday that demand for microchips had bottomed out and that a recovery was not yet on the cards.
- Reuters - UK Focus
GLOBAL MARKETS-Stocks up for eighth day, bond yields climb on trade signs
A gauge of global stocks rose for an eighth straight day to a six-week high and benchmark government bond yields advanced on Friday as signs of progress in trade talks between the United and China, as well as a solid report on U.S. retail sales, allayed recession worries. U.S. President Donald Trump said on Thursday he was potentially open to an interim trade deal with China, although he stressed an "easy" agreement would not be possible.
- Market Realist
The Dow Jones Rises for Eight Consecutive Days
The Dow Jones Industrial Average has risen 51.5 points today—up for the eighth consecutive trading session. The DJIA is up 1,100 points since September 3.
- Market Realist
Trump’s Interim Trade Deal: Dow at $30,000?
President Trump might consider an interim trade deal. However, the US government's top priority is to get a complete trade deal and not individual pieces.
- Reuters
Wall Street Week Ahead: With rate cut likely, market wonders how low Fed will go
With U.S.-China trade tensions roiling markets, investors are counting on support for stocks coming from a Federal Reserve willing to keep cutting interest rates to help the U.S. economy avoid a severe downturn. A quarter-point rate reduction is widely expected when the Fed issues its next policy statement on Wednesday, which would be the central bank's second such cut after lowering rates in July for the first time since 2008. “If the Fed gives forward guidance that suggests less than what the market is thinking, then you will probably see markets sell off," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia.
- FX Empire
New Records For U.S. Indices In Sight, Cautious Markets Rise On Trade Hope, Retail Sales Are Hot
Global markets rise on trade hopes but new records for the indices and a trade deal may be elusive.
- FX Empire
E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Close Under 27184 Produces Closing Price Reversal Top
Based on the early price action and the current price at 27239, the direction of the December E-mini Dow Jones Industrial Average on Friday is likely to be determined by trader reaction to 27184.
- Investing.com
Stocks - Dow and S&P Rise on Trade Hope; Nasdaq Falters
Investing.com – Wall Street was mixed on Friday, even as trade progress between the U.S. and China boosted investor confidence.
- Investing.com
Stocks - U.S. Futures Near All Time-Highs as China Offers Trade Hopes
Investing.com - The Dow is set to pass its intraday record high on Friday and other indexes were also near record highs after upbeat trade news from China, while an upside surprise on core inflation wasn't seen as enough to stop the Federal Reserve cutting rates next week.
- Yahoo Finance
Stock markets are reacting less to US 'trade-tariff tantrum': strategist
Paul Schatz, president of Heritage Capital, says investors aren't reacting to every twist and turn of U.S.-China trade war anymore.
- FX Empire
Stock Market Overview – Stocks Rise on Positive Trade Sentiment; CPI Remains Subdued
Yield rebound on strong jobless claims data
- Yahoo Finance
Trump unleashes selling tsunami in this hot area of the stock market
Value stocks are in. Momentum stocks are out. Thank you President Trump.
- Reuters - UK Focus
US STOCKS-Wall Street advances on trade concessions, euro zone stimulus
Wall Street advanced on Thursday, and the S&P 500 hovered a hair's breadth below its all-time high, buoyed by positive developments on the U.S.-China trade front and a promise of continued stimulus from the European Central Bank. Gains in technology shares helped push all three major U.S. stock indexes into the black.
- Investing.com
Stocks – U.S.-China Hope Boosts Market; S&P Flirts With New Highs
Investing.com - Stocks moved higher Thursday, with the S&P; 500 briefly topping its July 24 closing high, pushed higher by a thaw in U.S.-China trade relations.
- Yahoo Finance
Inflation data surge shouldn’t derail another Fed rate cut, economists say
A key measure of inflation, the consumer price index, rose to an 11-year high in August, according to new data released Thursday. But that shouldn’t throw cold water on the Federal Reserve’s expected rate cut next week, economists say.
- FX Empire
E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Could Be Setting Up Closing Price Reversal Top
Based on the early price action and the current price at 27247, the direction of the September E-mini Dow Jones Industrial Average futures contract the rest of the session is likely to be determined by trader reaction to yesterday’s close at 27144. Traders aren’t responding to a series of bullish news stories, which could be an early indication that investors are becoming worried about value.
- Reuters
Wall Street ends higher on trade, ECB stimulus hopes
Wall Street advanced on Thursday, and the S&P 500 ended the session within striking distance of its all-time closing high, buoyed by positive developments on the U.S.-China trade front and a promise of continued stimulus from the European Central Bank. Technology gains led the S&P 500 and the Nasdaq higher, while financials gave the biggest boost to the blue-chip Dow, which closed up for the seventh consecutive session, its longest winning streak since May. Stocks rose worldwide as China and the United States made concessions ahead of next month's planned talks in Washington, aimed at easing a trade war that has whipsawed markets and stoked recessionary fears for months.
- FX Empire
Global Markets Rise On Trade Thaw, ECB Cuts Rates And Buys Bonds, Hong Kong Down On LSE Deal Scrutiny
Global markets rise on trade hopes and stimulus plans, the S&P; 500 is striking distance from new all-time highs.
- Investing.com
Stocks - Wall Street Rises as Trump Delays China Tariffs; ECB Cuts Rates
Investing.com - Wall Street rose on Thursday after U.S. President Donald Trump delayed an expected tariff hike on Chinese imports, while the European Central Bank cut interest rates and re-introduced its purchasing buyback program in a bid to boost economic growth in the eurozone.
