|Day's range||2,916.01 - 2,946.52|
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FedEx reported results for its fiscal fourth quarter.
During the recent market swoon in May, the iShares Edge MSCI Min Vol USA ETF held its gains, while the S&P 500 fell.
(Bloomberg) -- U.S. Index futures gained and stocks in Europe reversed a decline as comments by Treasury secretary Steve Mnuchin rekindled hopes for a trade deal with China. Government bonds retreated.Futures on the S&P 500 index advanced after Mnuchin reiterated on Wednesday that negotiators are "about 90% of the way" to a trade deal with China, with leaders of the two countries set to meet on Saturday. The Stoxx Europe 600 index edged higher as banks and oil companies gained. Ten-year Treasury yields climbed above 2%, oil rose to a four-week high on supply concerns, and gold gave up some recent gains. Shares slid in Japan and Australia, while benchmarks in Hong Kong and India rose.Investors seem to be in a cautious mood ahead of the meeting between Presidents Donald Trump and Xi Jinping set for Saturday. Despite Mnuchin’s comments, a major breakthrough looks unlikely, with Trump’s advisers pushing him not to set a hard deadline and Washington mulling a fresh delay new of tariffs on an additional $300 billion of Chinese imports. Many traders hope the Federal Reserve will mitigate any headwinds to global growth with deep cuts, though Fed member James Bullard made clear Tuesday that’s not a given.“My biggest concern here is that people think higher tariffs, or the threat of higher tariffs, can be offset by the promise of lower rates,” David Kelly, chief global strategist at JPMorgan Asset Management, told Bloomberg TV. “That’s not going to work.”Elsewhere, Bitcoin surged above $12,000 for the first time in more than a year, and briefly came within striking distance of the $13,000 mark. New Zealand’s dollar fluctuated after its central bank left rates unchanged.Here are some key events coming up:The Group of 20 summit is in Osaka, Japan, on Friday and Saturday.These are the main moves in markets:StocksFutures on the S&P 500 Index climbed 0.5% as of 10:27 a.m. London time.The Stoxx Europe 600 Index gained 0.1%.The U.K.’s FTSE 100 Index advanced 0.1%, the highest in more than a week.The MSCI Emerging Market Index increased 0.1%.The MSCI Asia Pacific Index decreased 0.4%, the lowest in a week.CurrenciesThe Bloomberg Dollar Spot Index increased less than 0.05%.The euro fell 0.1% to $1.136.The British pound declined 0.1% to $1.2682, the weakest in a week.The Japanese yen declined 0.4% to 107.66 per dollar, the weakest in a week on the largest drop in almost 11 weeks.BondsThe yield on 10-year Treasuries gained three basis points to 2.02%, the biggest gain in more than two weeks.Germany’s 10-year yield gained two basis points to -0.31%.Britain’s 10-year yield increased one basis point to 0.804%.CommoditiesWest Texas Intermediate crude gained 1.8% to $58.89 a barrel, the highest in four weeks.Gold dipped 1.2% to $1,405.99 an ounce, the first retreat in more than a week and the biggest decrease in almost three months.\--With assistance from Ksenia Galouchko.To contact the reporter on this story: Laura Curtis in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Samuel Potter at email@example.com, Robert Brand, Ravil ShirodkarFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
As shown in the accompanying graph, the S&P 500, including dividends, has been underperforming the so-called Total Market Index for over 18½ years. The total market in the U.S. consists of approximately 3,600 listed companies: large-cap, microcap, and everything in between. For this reason, the accompanying graph plots specific mutual funds that any investor could have easily purchased.
(Bloomberg) -- With geopolitical tensions and trade fears simmering, all the action is in havens as nervous investors pile up on gold and Swiss francs. The overall market may be resilient for now, but unresolved economic and political issues could still hit confidence and corporate earnings.In an eerie calm, stock volatility remains low for both the S&P 500 and the Euro Stoxx 50 ahead of the G-20 meeting between U.S. President Donald Trump and China’s Xi Jinping, during a strong month for equities. Europe’s benchmark and the S&P 500 have gained 5% and 6%, respectively in the period.“I’ve been surprised at how benign the market environment has been during this year so far, given the amount of stuff that’s going on in the wider economic and geopolitical context, both here and internationally,” says Ken Wotton, a fund manager at Gresham House in London. “I just find it very hard to believe there won’t be periods where sentiment, risk appetite retracts and there’s more volatility in the market.”The market’s composure jars with the lack of confidence from analysts, who have been cutting earning estimates as much as in January, according to Citigroup’s earnings revisions index.The worries are visible in investment flows, though. Bank of America Merrill Lynch’s clients have been net sellers of U.S. stocks in the past week for the first time in seven weeks, in a possible effort to freeze gains ahead of the G-20 summit, the bank’s strategists say. During the past five weeks, foreign-exposed sectors saw bigger outflows than domestics, they add.The market may have learned to live with trade tension, counting on dovish central bank policies to act as a cushion, but it doesn’t change the fact that global commerce has been reshaped by tariffs and disputes. China’s imports from Japan, South Korea and the U.S. fell 16%, 18% and 27% respectively last month from a year ago. Those from the European Union are still growing (+1.8%), but at a much slower pace.That’s also why the Trump-Xi meeting matters, even if a deal is unlikely. UBS Wealth strategists don’t expect any breakthrough on trade, nor extra tariffs immediately. Their base-case scenario is for a prolonged truce between the U.S. and China that would likely extend or consolidate the stock rally. But a breakdown would thump economies and markets, they say.In the meantime, Euro Stoxx 50 futures are trading down 0.3% ahead of the open.SECTORS IN FOCUS TODAY:Watch tobacco firms after San Francisco became the first U.S. city to pass a ban on e-cigarettes. Watch British American Tobacco and Imperial Brands.Watch chipmakers after U.S. group Micron Technology beat earnings expectations and said it has resumed making some shipments to China’s Huawei. Watch Infineon, STMicroelectronics and AMS after U.S. peers rallied.Watch oil stocks as crude prices jumped after a report suggesting stockpiles in the U.S. have continued to shrink, and tensions with Iran showed no sign of abating.Watch the pound and U.K. stocks after no-deal has also moved to the center of the debate between the two candidates for prime minister, with front-runner Boris Johnson proposing two exit strategies that the EU has already rejected.Watch the bond market pricing increasingly lower interest rates. This 100-year bond yields just over 1%, highlighting just how desperate investors are for returns.COMMENT:“Rate cuts/QE, assuming sufficient and timed correctly, would seek to avoid a deep recession and underpin economic growth,” Citi stratetegists write in a note. “We advise taking a step back and asking why (Central Banks) intervention is required? Because all is not well. And it is not just the deepening negative impact of trade wars, many economies were already struggling to grow. Yes, CB stimulus can drive a risk asset rally but cyclical and structural headwinds remain (read Japanification, growing populism, weak bank profitability and capital return uncertainty).”COMPANY NEWS AND M&A:Natixis’s H20 Funds Hemorrhage $6.4 Billion as Crisis DeepensUBS CEO Says He Feels a ‘Biting Headwind’ From Swiss RegulatorsYara Lifts Div Target to 50% Net Income; Widens Improvement PlanSchneider Electric Confirms FY and 2021 TargetsMediobanca, J.C. Flowers Said in Talks for Julius Baer’s KairosSelf Storage Offering Prices 13m Shares at NOK19.25/ShareRenault’s Senard Said No Discussions W/ Fiat Ongoing Now: EchosDSV Extends Panalpina Offer Until July 17 From June 26Autos: Europe’s Tough New Emissions Rules Come With $39 Billion ThreatTechnipFMC Agrees to Pay $301.3 Million to Resolve Bribery CaseEDP Agrees to Sell EU470m of 2019 Tariff Deficit to TagusDIA Reaches Restructuring Agreement With Syndicated LendersEQT Said to Seek Sept. IPO Valuing Company at EU7b: BorsenNOTES FROM THE SELL SIDE:Buzzi Unicem fundamentals have kept improving since Morgan Stanley assumed coverage in May, and with valuation also turning more favorable plus an upside consensus risk, stock is upgraded to overweight from equal-weight.Efficient and well-run U.K. water companies will remain attractive even if there is a significant step-down in allowed regulatory returns, Jefferies says in a note initiating coverage of the sector. Severn Trent started at buy, United Utilities and Pennon at hold.The balance of risk for Jupiter Fund Management looks to be moving toward the upside, with flows starting to stabilize even if investment performance remains a little mixed, Peel Hunt says in note, upgrading stock to buy.Berenberg raised Adidas to buy from hold, with 53% increase in PT to EU315 (the highest among analysts tracked by Bloomberg), with broker citing overly conservative consensus estimates and a 20% discount to Nike.TECHNICAL OUTLOOK for Stoxx 600 index:Resistance at 392.7 (July 2018 high); 397.9 (May 2018 high)Support at 381.4 (50-DMA); 374.5 (61.8% Fibo)RSI: 56.9TECHNICAL OUTLOOK for Euro Stoxx 50 index:Resistance at 3,514 (May high); 3,596 (May 2018 high)Support at 3,411 (50-DMA); 3,403 (61.8% Fibo)RSI: 58.7MAIN RESEARCH AND RATING CHANGES:UPGRADES:Adidas upgraded to buy at BerenbergBuzzi Unicem raised to overweight at Morgan Stanley; PT 20 EurosJupiter upgraded to buy at Peel HuntNovo Nordisk Upgraded to Buy at SEB Equities; PT 385 KronerSalvatore Ferragamo upgraded to hold at Jefferies; PT 21 EurosDOWNGRADES:BBVA downgraded to sell at SocGen; PT 4.30 EurosEland Oil & Gas cut to hold at Panmure Gordon; PT 1.35 PoundsTed Baker downgraded to sector perform at RBCINITIATIONS:Aena rated new buy at Berenberg; PT 215 EurosAeroports de Paris rated new hold at Berenberg; PT 135 EurosElis rated new overweight at Morgan Stanley; PT 19 EurosFlughafen Wien rated new buy at Berenberg; PT 46 EurosFraport rated new sell at Berenberg; PT 57 EurosPennon rated new hold at Jefferies; PT 7.70 PoundsSecuritas rated new underweight at JPMorgan; PT 145 KronorSevern Trent rated new buy at Jefferies; PT 23.40 PoundsUnited Utilities rated new hold at Jefferies; PT 8.70 PoundsZurich Airport rated new sell at Berenberg; PT 151 FrancsMARKETS:MSCI Asia Pacific down 0.3%, Nikkei 225 down 0.7%S&P 500 down 0.9%, Dow down 0.7%, Nasdaq down 1.5%Euro down 0.07% at $1.1359Dollar Index up 0.15% at 96.28Yen down 0.22% at 107.44Brent up 1.7% at $66.1/bbl, WTI up 2.1% to $59/bblLME 3m Copper down 0.4% at $6015/MTGold spot down 1.1% at $1408.3/ozUS 10Yr yield up 2bps at 2.01%ECONOMIC DATA (All times CET):8:45am: (FR) June Consumer Confidence, est. 100, prior 9910am: (IT) 1Q Deficit to GDP YTD, prior 2.1%10:30am: (UK) May UK Finance Loans for Housing, est. 41,000, prior 42,989* For a daily wrap on developments in European equity capital markets, click here\--With assistance from Lisa Pham.To contact the reporter on this story: Michael Msika in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Blaise Robinson at email@example.com, Jon MenonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Consumer debt is growing to worrisome levels. Ben Mohr, senior research analyst of fixed income at investment consultant Marquette Associates, calculated that total U.S. consumer debt hit $14 trillion in the first quarter of 2019, surpassing the roughly $13 trillion of leverage accumulated in credit cards, auto loans and mortgages and other debt back in 2008, when those souring loans and securities pegged to them helped to send global markets into a tailspin (see attached chart). Mohr told MarketWatch that the increase in student loans — often cited as a source of consternation for economists and strategists — saw a notable increase.
Some ten years since the 2008-09 U.S. housing bubble, which sparked a global financial crisis, worries about the health of the global housing market persist.
President Donald Trump Tuesday morning thanked himself for a stock market that has been mostly clambering to new heights. The 45th president via Twitter touted the buoyancy of the equity markets, saying: “Stock Market is heading for one of the best months (June) in the history of our Country. Stock Market is heading for one of the best months (June) in the history of our Country.
U.S. stocks, bonds, gold and oil are all rallying together this week, sustained by the Federal Reserve reassurance that it may lower interest rates soon to help offset the “cross currents” in the global economy generated by the Trump administration’s erratic trade policy. U.S. stocks rallied to new records last week after the Federal Reserve’s suggestion, repeated by Fed Chairman Jerome Powell as recently as Tuesday, that easier monetary policy may be on the horizon.
Stocks in Asia were subdued on Wednesday after U.S. Federal Reserve Chairman Jerome Powell tempered expectations for a potential interest rate cut.
All eyes are on the Donald Trump-Xi Jinping meeting this weekend at the G-20 summit. One Fed Governor doesn’t see a big rate cut next month.
Stocks aren’t in “melt-up” mode yet, but the June rebound could soon begin to foster the same sort of “fear of missing out” feeling that prevailed in April if speculators come off the sidelines, says one quantitative analyst.
(Bloomberg) -- For stock bears waiting for the $20 trillion rally to unravel, it’s getting late. They see a lengthening list of indicators that show time is running out on the longest bull market ever recorded.The two largest world superpowers are fighting a trade war while the Federal Reserve contemplates rate cuts in the face of slow economic growth and elusive inflation. Bonds continue to rally, with the 10-year once again falling below 2% -- the bearish yin to equities’ yang. There’s more, too.“We have this weird combination of U.S. stocks at all-time highs, very low forward interest rates, and we see signs of bubbles kind of popping out in all different places,” Connor Browne, portfolio manager for New Mexico-based Thornburg Investment Management, said in an interview at Bloomberg’s New York headquarters. “There are lots of reasons to be worried. Something has to give and there’s some chance that it’s stocks.”From consumer confidence, to earnings and jobless claims, below are some of the things chart watchers say might have seen their peak.Fading ConfidenceWrinkles are starting to show in the faces of consumers. Conference Board data showed sentiment fell in June to the lowest since 2017 on Tuesday. At the same time, survey respondents turned bearish on U.S. stocks at one of the fastest paces since the global financial crisis. The deterioration marks a swift turn from similar data in May that marked the best sentiment in 15 years.To Michael Shaoul, chief executive officer at Marketfield Asset Management LLC, there’s reason to believe consumer confidence peaked back in October 2018. That “represents a warning for the overall investment cycle given that confidence measures historically peak fairly close to the overall bull market,” he wrote in an email.Slowing Earnings GrowthIt’s one of Wall Street’s big dramas. Did earning growth peak as effects from President Trump’s tax overhaul sunk in? Companies in the S&P 500 posted three straight quarters of 25% profit growth last year. This year, analysts expect earnings for the benchmark to come in at $166.20 a share. Sure, that’s still a gain of 4% from last year, but down from the near 8% increase that was expected in January.It remains true that peak earnings growth doesn’t necessarily spell the end to the stock market cycle. Richard Bernstein Advisors research has shown that since 1980, earnings growth has peaked 11 times, and in the years following 10 of those periods, S&P 500 returns were positive.Still, the direction of earnings is closely intertwined with stock market returns. In 2000, S&P 500 profit growth topped out in the same quarter that marked highs for the index. When the benchmark rolled over in 2007, earnings gains had been waning for three quarters. Profits may not be doomed to fall this year, but they’re likely not going to get much better, either.Jobless Claims Bottom?It’s looking possible jobless claims hit a trough for the current economic cycle. In April, weekly claims dropped to 192,000, the lowest number since 1969, and the count has been higher ever since. Estimates for this Thursday’s release call for 220,000, above the last reading.If the pattern continues, investors should take note. Jobless claims and the S&P 500 have moved inversely since the turn of the century, with bottoms in the data coinciding with peaks for stocks. Andrew Zatlin of SouthBay Research Inc., the top Bloomberg-ranked jobless claims forecaster, sees “pre-recessionary signals” in the data.“When Initial Claims are the same as the prior year, it’s a sign that businesses have stopped growing,” he wrote in an email. “In the year to date (24 weeks), most weeks have been at or above the prior year’s nominal levels.”Movement of GoodsStrategists at Morgan Stanley often cite a more unconventional index as a sign off worry -- the Cass Freight Index, which in essence measures the flow of goods through shipments. The gauge recently fell 6.5% year-over-year and now stands at a “critical level,” according to the firm. If it slips any further, the index may be signaling a recession, strategists led by Mike Wilson warned.In the most recent report, Cass Freight said, “We see the shipments index as going from ‘warning of a potential slowdown’ to ‘signaling an economic contraction.”’\--With assistance from Olivia Rinaldi and Vildana Hajric.To contact the reporter on this story: Sarah Ponczek in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Gold soared to an almost six-year high on Tuesday on escalating U.S.-Iran tensions, while equity markets slid on disappointing economic data and uncertainty on whether the Federal Reserve will cut interest rates in July as has been expected. Fed Chairman Jerome Powell said in a speech the U.S. central bank is insulated from short-term political pressures as policymakers wrestle with whether to cut rates amid slowing growth as President Donald Trump has demanded. Equity markets have rallied this month in anticipation that Fed policymakers would cut rates, but Powell's remarks cast doubt on those expectations when he referred to the Fed's independence.
Information technology shares and those related to telecoms suffered sharp losses Tuesday, as commentary from the Federal Reserve moderated hopes for a substantial reduction of benchmark borrowing costs. Rate-cut hopes have thus far underpinned equity market's record rally. The Dow Jones Industrial Average fell 0.7%, to 26,548, those for the S&P 500 index finished 1% lower at 2,917, with the info tech sector losing 1.8% and the communication services sector shedding 1.6% to lead the 11 S&P 500 sectors lower Tuesday. Shares of those companies, including Facebook Inc. have been among the best performers as the broader market carved out new records, with the S&P 500 setting its first closing record since April 30 on Thursday. As tech-related stocks got clobbered, the technology-heavy Nasdaq Composite Index endured the brunt of the day's selling, down 1.5% at 7,885, representing the worst day for the index sine June 3. Speaking at the Council on Foreign Relations in New York at 1 p.m. Eastern Time, Fed Chairman Jerome Powell said the rate-setting Federal Open Market Committee was "grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation," in prepared remarks. Before that comment, St. Louis Fed President James Bullard, a dovish FOMC member who had advocated for a rate cut, said he didn't endorse an aggressive cut to benchmark rates, which stand at a range of 2.25%-2.50%.
U.S. stocks slump after Federal Reserve Chairman Jerome Powell said he wanted to avoid a knee-jerk reaction to any one data point
(Bloomberg) -- U.S. stocks fell the most in more than three weeks as Federal Reserve Chairman Jerome Powell warned the downside risks to the economy have increased and Trump administration officials signaled a trade deal at the Group of 20 meeting is unlikely. Treasuries and the dollar advanced.The S&P 500 fell for a third-straight session, the longest streak since May 9, as Powell reiterated the case for somewhat lower interest rates, but stopped short of signaling a cut was imminent. Markets have been pricing in a reduction of nearly 50 basis points in July. St. Louis Fed President James Bullard said a cut of that magnitude seemed unwarranted.Tech shares led losses, with the Nasdaq 100 falling more than 1.7%, after a senior Trump administration official told Bloomberg the U.S. won’t accept further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expected from the leaders’ summit.The two-year Treasury was little changed around 1.73%, while the 10-year dropped below 2%, a level that until last week it hadn’t breached in three years. The dollar rose for the first time in six sessions.With stress between the U.S. and Iran building and the White House apparently playing down hopes of a trade breakthrough when Trump and China’s Xi Jinping meet this week, investors have edged away from risk assets following the recent central bank-fueled rally. The market has been betting the Fed will produce deep cuts to interest rates this year, and comments by officials Tuesday highlighted investor sensitivity to any hints that may not happen.There’s “the short-term headlines related to people watching the G-20 and the potential for any news related to the US-China negotiations. That’s one piece that in the shorter run is making the markets a little uneasy. The other one is related to the geopolitical tensions with Iran,” said Omar Aguilar, the chief investment officer for equities at Charles Schwab Investment Management. “The bigger picture still drives the markets, which is we have lower interest rates coming up and the market continues to place a big bet on a July rate cut by the Fed.”Elsewhere, Drugmaker Allergan surged after agreeing to be bought by AbbVie Inc. Bitcoin extended its gains through $11,000. West Texas oil edged lower as investors weighed escalating tensions between the U.S. and Iran against the possibility of OPEC+ extending production cuts.Here are some key events coming up:MSCI Inc. announces results of its 2019 Market Classification Review on Tuesday, including whether Kuwait gets upgraded from frontier to emerging-market status.The Group of 20 summit is in Osaka, Japan on Friday and Saturday.These are the main moves in markets:StocksThe S&P 500 Index fell 0.95%, the biggest decline since May 31, as of 4 p.m. New York time.The Stoxx Europe 600 Index dipped 0.1%.The MSCI Emerging Market Index sank 0.8%.The MSCI Asia Pacific Index decreased 0.4%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.1%.The euro dropped 0.3% to $1.1370, the first retreat in a week.The British pound declined 0.4% to $1.2696.The Japanese yen climbed 0.1% to 107.16 per dollar.BondsThe yield on 10-year Treasuries declined three basis points to 1.99%.Germany’s 10-year yield fell two basis points to -0.31%, the lowest on record.Britain’s 10-year yield dipped two basis points to 0.794%.CommoditiesWest Texas Intermediate crude was little changed at $57.89 a barrel.Gold increased 0.6% to $1,426.50 an ounce.\--With assistance from Cormac Mullen and Samuel Potter.To contact the reporters on this story: Randall Jensen in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.comTo contact the editors responsible for this story: Samuel Potter at firstname.lastname@example.org, Yakob Peterseil, Jeremy HerronFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
President Donald Trump on Tuesday talks tough about Iran, with his warnings coming just a few days after he called off U.S. airstrikes against Iranian targets that would have been in retaliation for the downing of an American drone.