|Day's range||3,001.15 - 3,015.02|
|52-week range||2,346.58 - 3,017.80|
U.S. stocks were mixed Tuesday afternoon as investors digested a wave of signals from officials over U.S.-China trade relations and monetary policy, along with an influx of corporate earnings results and economic data.
Bank of America Merrill Lynch releases its monthly survey on how fund managers feel about the stock market.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.U.S. stocks fell from a record high as President Donald Trump said he could impose more tariffs on China, reminding investors that the trade spat remains unresolved. Treasuries dropped and the dollar rose.The S&P 500 Index halted a five-day rally, with energy producers joining an oil sell-off and technology giants facing an antitrust showdown with Congress. Goldman Sachs Group Inc. jumped on better-than-estimated results in its trading unit, and JPMorgan Chase & Co. rebounded from losses triggered by a disappointing lending outlook. Benchmark 10-year yields climbed on solid data, then pared their surge after Federal Reserve Chairman Jerome Powell said the central bank “will act as appropriate” amid increased uncertainties.Investors remained locked into the notion of a Fed rate cut this month even after strong retail sales, factory output and housing data. While Powell’s remarks resembled his July 10-11 testimony to U.S. lawmakers, they continued to support the case for monetary easing amid risks stemming from Trump’s trade policies and slower global growth.“Trade’s a big, big issue,” said Dave Campbell, a principal at San Francisco-based BOS, which manages about $4.5 billion. “There’s a lot of uncertainties -- all of these are weighing on people’s minds right now.”Elsewhere, Bitcoin slid below $10,000 just three weeks after surging above it for the first time in more than a year as U.S. legislators expressed deep skepticism about the viability of cryptocurrencies. The euro slipped as investor confidence in Germany’s economic outlook fell. The pound slumped as the market once again reckoned with no-deal Brexit risk after the contenders to be U.K. prime minister toughened their rhetoric.Here are some key events coming up:Bank of America Corp. and Taiwan Semiconductor are among companies due to report results this week.Monetary policy decisions are due in Indonesia, South Korea and South Africa on Thursday.These are the main moves in markets:StocksThe S&P 500 dipped 0.3% to 3,004.04 as of 4 p.m. New York time.The Stoxx Europe 600 Index added 0.4%.The MSCI Asia Pacific Index decreased 0.2%.CurrenciesThe Bloomberg Dollar Spot Index increased 0.4%.The euro declined 0.4% to $1.1209.The British pound decreased 0.9% to $1.2408.The Japanese yen dipped 0.3% to 108.28 per dollar.BondsThe yield on 10-year Treasuries gained three basis points to 2.11%.Germany’s 10-year yield climbed one basis point to -0.24%.Britain’s 10-year yield increased two basis points to 0.821%.CommoditiesThe Bloomberg Commodity Index slid 1.1%.West Texas Intermediate crude sank to $57.62 a barrel.\--With assistance from Adam Haigh, Samuel Potter, Laura Curtis and Yakob Peterseil.To contact the reporters on this story: Rita Nazareth in New York at firstname.lastname@example.org;Vildana Hajric in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- President Donald Trump reiterated that he could impose additional tariffs on Chinese imports if he wants, after promising to hold off on more duties in a trade-war truce he reached with China’s Xi Jinping last month.Stocks fell from a record after Trump made the remarks at a cabinet meeting Tuesday at the White House.“We have a long way to go as far as tariffs where China is concerned, if we want. We have another $325 billion we can put a tariff on, if we want,” Trump said. “So, we’re talking to China about a deal, but I wish they didn’t break the deal that we had."Trump and Xi called a tariff ceasefire and agreed to resume trade talks after meeting at the Group-of-20 summit in Japan in late-June, breaking a six-week stalemate. The U.S. president said he’d hold off on a threat to impose tariffs on an additional $300 billion in Chinese imports, and that Xi had agreed to buy large amounts of U.S. farm goods in exchange. But those purchases have yet to happen.U.S. shares snapped a five-day rally following Trump’s remarks Tuesday. Treasury 10-year yields surged earlier in the day after solid economic data added to signs the U.S. expansion is holding up even as central bank officials indicated they’re ready to cut rates.Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer expect to have another call this week with top trade negotiators in China, and the two may travel to Beijing for meetings if the discussions by phone are productive, Mnuchin said Monday.Trump resumed pressure on China through tweets this week about the ongoing trade tensions. On Monday, the president indicated that the U.S. tariffs were having their intended impact by squeezing China’s economy.China released figures this week showing growth in the world’s second-largest economy slowed to 6.2% in the second quarter, the weakest pace since at least 1992 when the country began collecting the data.Meanwhile, Trump last week complained that China wasn’t living up to its promise of increased purchases of American agricultural goods. “China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon!” Trump said on Twitter.The U.S. expects China to announce significant purchases of from U.S. farmers, Trump’s top economic adviser, Larry Kudlow, told reporters Monday, implying that the step is necessary for trade talks between two nations to advance.The talks broke down in May after the U.S. accused China of reneging on commitments in a draft deal that Mnuchin said had been 90% completed. China has said there’ll be no trade deal unless the U.S. removes all existing tariffs put in place during the year-long trade war.(Updates with Trump comment in third paragraph.)To contact the reporter on this story: Justin Sink in WASHINGTON at email@example.comTo contact the editors responsible for this story: Alex Wayne at firstname.lastname@example.org, Sarah McGregor, Robert JamesonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A gauge of global equities fell on Tuesday and U.S. Treasury yields climbed as a stronger-than-anticipated report on retail sales raised the possibility the Federal Reserve could move towards a less dovish stance. U.S. retail sales rose 0.4% in June, as households stepped up purchases of motor vehicles and a variety of other goods. While the Fed is still largely expected to cut rates by a quarter of a percentage point at its July 30-31 policy meeting, expectations for a more aggressive half a percentage point cut have been scaled back.
There's a new opportunity emerging due to the divergence between "value" stocks and "defensive" stocks, a top J.P. Morgan strategists says
(Bloomberg) -- U.S. stock investors are homing in on a strategy that promises a gigantic windfall if stocks can extend their bull run through the second half of the year.After Maxwell Grinacoff, a derivatives and quantitative strategist at Macro Risk Advisors, observed a $1.6-million wager in the options market last week that pays off if the S&P 500 Index climbs another 8% to 10% by year-end, he recommend an even more bullish position in a recent note.It goes like this: buy calls on State Street’s S&P 500 tracker -- the SPY ETF -- that expire in December with a strike price of 330. Sell calls at the same expiry with the strike price of 335, capping upside but also cheapening the trade.If the fund climbs a bit more than 11% to end the year at or above 335, the $0.37 premium spent would turn into $5 -- a return of 13.5 times, excluding transaction costs or commissions.That means SPY would need to advance at least 34% in 2019 for the max payout to be achieved, a level that hasn’t been seen in more than two decades. But it so happens that the last time it occurred, 1995, was a year in which the Federal Reserve cut rates with stocks at all-time highs, a phenomenon rates traders are expecting to occur again later this month.“We have observed bullish year-end structures trade in large size recently, perhaps as investors look to ‘hedge’ a continued market rally into year-end,” Grinacoff wrote.This trade holds appeal to investors who want to lock in gains but still capture significant upside, or those with a fear of missing out even more after having been on the sidelines, Grinacoff reasons. And the flatness of call wing skew -- that is, similar implied volatilities for relatively far out-of-the-money options at different strike prices -- makes financing such a position cheaper than it often is.“There is the potential for a catch-up trade which could be a tailwind for equities through year-end,” he writes.Over the last 50 years, the S&P 500 has been up 10% over any given six-month timeframe more than a quarter of the time. In the almost 30 years since 1990, it’s been roughly a coin flip as to whether the S&P 500 gains 10% in the second half of the year. And yet the pricing of the call spread suggests that there’s only a 10% chance that SPY ends the year above 330.If there’s cause for worry among investors, it’s a replay of a scenario in which everyone wants to own options on stocks, but few want to own actual equities. The attractiveness of such call-spread trades -- and a penchant for stock-replacement strategies across Wall Street due to low implied index-level and single-stock volatility heading into earnings season -- is a similar set-up to when U.S. stocks peaked in September 2018. Investors elected to gain exposure through calls in anticipation of a sharp rally (and because it was relatively inexpensive to do so), but then the underlying went no bid until after Christmas.To contact the reporter on this story: Luke Kawa in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Canaccord Genuity's major indicators are approaching levels they were at right prior to or during the market correction in May, suggesting a market pullback is coming.
President Donald Trump says his administration will “take a look” at allegations made by Silicon Valley venture capitalist Peter Thiel that Google-parent Alphabet Inc. has been infiltrated by the Chinese government.
U.S. stock indexes Tuesday midday were trading near session lows, though only modestly lower, after President Donald Trump described progress toward a China and U.S. tariff pact as "a long way to go" to reporters. Trump made his comments during a cabinet meeting at the White House, with reporters in attendance. The Dow Jones Industrial Average added to modest losses, and was recently trading down 46 points, or 0.2%, at 27,313, but had been as low as 27,296. The S&P 500 index declined 0.3% at 3,004, near its intraday low at 3,002.55, while the Nasdaq Composite Index was 0.5% lower at 8,217, after touching a session nadir at 8,212.14. All that said, all three benchmarks finished at records on Monday, with expectations growing that the Federal Reserve will ease monetary policy, providing further support for stocks to climb. However, trade disputes between the U.S. and its international counterparts, notably Beijing, have been at the center of investors' concerns and the chief reason the Fed is said to be considering a pre-emptive rate cut, even though most of the domestic economy remains healthy.
Stock markets were quiet again during the trading session on Tuesday, as the Monday session was very quiet. Ultimately, this is a market that only traded 60% of its normal volume the previous day, and Tuesdays looking very similar.
The US dollar rallied during the trading session on Tuesday, breaking above the top of the shooting star shaped candle that formed on Monday. That inverted hammer is a bullish sign being broken to the upside but we do see a significant amount of resistance above.
A look back at history shows that the Fed has been willing to cut rates with stocks at or near all-time highs in the past, but it’s a phenomenon that hasn’t been seen in more than 20 years. And the Fed has never moved to ease when unemployment stood below 4%.
Roku Inc. shares hit an new all-time high in intraday trading Tuesday, extending a massive year-to-date rally for the stock. Shares climbed as much as 5.9% in the session, reaching a price of $110.46 before giving back some of their gains. They were recently up 5.1%, to $109.65. The company is projected to report second-quarter results on or about Aug. 7, according to FactSet, with the streaming platform for TV expected to report a loss of 22 cents a share after a breakeven quarter a year ago, while revenue is forecast to grow 43% to $223.9 million. Roku's stock has rocketed 259% so far this year, while the S&P 500 has gained 20%.
(Bloomberg) -- Hedge-fund performance may be looking up this year, but the fees they command from investors are dwindling under pressure from less costly asset managers.The average management fee charged by new hedge funds globally in the first half of this year slipped to 1.2% from 1.6% in 2007, before the financial crisis battered the industry, according to a report from Eurekahedge. Fees linked to performance fell to about 14.5%, leaving funds overall well below the “two and 20” fee model once considered standard.Years of poor performance have led many investors to seek out less expensive alternatives. Hedge funds reported the best first half in a decade this year as managers capitalized on the surge in stocks, but the 5.7% gain across the industry paled in comparison with the S&P 500 Index, which returned almost 19% in the period. And it came after hedge funds delivered their worst performance since 2011 last year.While more than half of hedge-fund assets worldwide are managed by firms with a performance fee of at least 20%, managers who charge less have boosted their market share to 41.3% of industry assets in June from 16.3% at the end of 2008, according to the report published on Tuesday.The “asymmetric” nature of performance fees -- hedge fund managers share in their clients’ profits, but not their losses -- have contributed to the pressure from investors to charge less, said Mohammad Hassan, head analyst of hedge fund research and indexation at Eurekahedge.“The point that’s being made is that when the fund is performing well, they will pay,” he said.To contact the reporter on this story: Ali Ingersoll in London at email@example.comTo contact the editors responsible for this story: Shelley Robinson at firstname.lastname@example.org, Patrick Henry, Suzy WaiteFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The cost of imported goods fell in June by the steepest amount in six months, reflecting lower oil prices and a weaker global economy wracked by U.S.-China trade tensions.
Wells Fargo & Co.'s expected dividend increase would boost its implied dividend yield to more than double its financial-sector peers and the broader stock market. Wells Fargo said in its second-quarter report that after receiving a "non-objection" to its capital plan submission from the Federal Reserve, the bank expects to raised its quarterly dividend by 13% to 51 cents a share from the current rate of 45 cents a share. Based on current stock prices--down 0.3% at $46.59--the new annual dividend rate of $2.04 would imply a dividend yield of 4.38%. That compares with the current implied dividend yields of 1.94% for the SPDR Financial Select Sector ETF and the S&P 500's implied yield of 1.92%, according to FactSet. Wells' stock has lost 18.1% over the past 12 months, while the financial ETF has gained 2.7% and the S&P 500 has advanced 7.7%.
Sales at U.S. retailers rose solidly in June for the fourth month in a row, pointing to a strong rebound in consumer spending in the second quarter that suggests the economy is not as fragile as the Federal Reserve apparently believes.
WASHINGTON (MarketWatch) - Business inventories in the U.S. rose 0.3% in May, the Commerce Department said Tuesday. Sales rose 0.2% in the month. The ratio of inventories to sales, meanwhile, was unchanged at 1.39. That's how many months it would take to sell all the inventory on hand. One year ago, the inventory-to-sales ratio was 1.34. An increase in inventories adds to gross domestic product while a decrease subtracts from it. The increase in inventories in May was also unchanged at 0.5%.
A crop of long-awaited technology companies coming to the public market this year created a "frothy" period, Bernstein said on Tuesday
Stocks got off to a slightly lower start Tuesday as investors digested a stream of earnings reports, including results from Dow components Johnson & Johnson and Goldman Sachs Group Inc. . The Dow Jones Industrial Average fell around 7 points, or less than 0.1%, to 27,352, while the S&P 500 was off 0.1% at 3,011.12. The Nasdaq Composite fell 0.1% to 8,245.28. All three major indexes eked out record finished in subdued trading on Monday. Shares of Goldman Sachs were up 0.9%, while Johnson & Johnson shares fell 1.7%. Both companies topped earnings forecasts.