Written by Gary
Major US stock indexes sharply fell into the red ink (SPY -0.8) after investors cautiously fall back after Fed’s Powell dashes rate-cut hopes.
The Market in Perspective
| Here are the headlines moving the markets. | |
 | U.S. Fed says no strong case for hiking or cutting ratesThe U.S. Federal Reserve on Wednesday held interest rates steady and signaled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth and the likelihood that weak inflation will edge higher. |
| Fed keeps interest rates steady as U.S. economy motors alongThe Federal Reserve held interest rates steady on Wednesday as policymakers took heart in continued U.S. job gains and economic growth and held out hope that weak inflation will edge higher. |
| UK’s May fires defense secretary over Huawei leakBritish Prime Minister Theresa May fired her defense minister on Wednesday over a leak of discussions in the National Security Council about Chinese telecoms company Huawei, the latest of her allies to be ousted from government. |
| U.S., China reported near deal to end some tariffs; talks ‘productive’The United States and China are nearing a trade deal that would roll back a portion of the $250 billion in U.S. tariffs on Chinese goods, Politico reported on Wednesday after U.S. Treasury Secretary Steven Mnuchin said the two countries completed “productive” talks in Beijing. |
| U.S. FAA directive enshrines changes to Boeing 787 DreamlinerThe U.S. Federal Aviation Administration on Wednesday said it was mandating new flight control software and parts to Boeing Co’s 787 Dreamliner to address what it called an unsafe operating condition of certain products on the plane. |
| Traders trim bets on Fed rate cut later this yearTraders of U.S. short-term interest rate futures began trimming bets the Federal Reserve will cut rates before the end of the year after Fed Chairman Jerome Powell said the U.S. central bank is comfortable with its current stance and sees no strong case to shift it. |
| Boeing names special adviser to CEO amid 737 MAX crisisBoeing Co on Wednesday named a new senior adviser to Chief Executive Officer Dennis Muilenburg and the board of directors as the world’s largest planemaker faces its biggest crisis in years after two deadly crashes of its 737 MAX. |
| Brailsford hits back at critics as Sky becomes Team INEOSDave Brailsford is accustomed to answering awkward questions and the man who masterminded Britain’s rise as a cycling powerhouse was at it again as Team Sky transformed into Team INEOS on Wednesday. |
| Global stocks higher, dollar weaker in wake of Fed statementGlobal equities advanced on Wednesday for a fourth straight day of gains after the U.S. Federal Reserve held rate steady as expected and as Apple’s strong results eased concerns about earnings growth. |
| Stocks, Bonds, & Bullion Slammed As Powell Pivots “Transitorily” HawkishDespite his best efforts, Fed Chair Powell managed to spoil the party with his use of one of The Fed’s favorite words – “transitory” – signaling that expectations for rate-cuts predicated on inflation staying low are perhaps not as set in stone as the market believes. The hawkish tilt was very evident in the market’s implied rate-change pricing… |
| Is It Time To ‘Sell In May’ This Time?It’s that time of year again… but this one may be ‘different’. Confirming the old axiom to “sell in May and go away,” LPL Financial notes that the next six months have historically been the worst for stocks (seasonally-speaking). |
| Negative-Yielding Bonds Are Breaking Records (And Why That’s A Bad Thing)Authored by John Rubino via DollarCollapse.com, Yet the practice of stashing wealth in places where it yields nothing (and maybe even costs a bit for storage) is more common than you might think. Chinese, Russians, and Brazilians, for instance, buy US and Canadian condos and leave them empty as a way of moving their money beyond the reach of their rapacious governments. The taxes and condo fees produce a negative return, but most of the original investment will be there when needed. Other people store gold and silver in overseas vaults, paying 1% or so each year in fees. As the saying goes, such people are more concerned with return of capital than return on capital. Even so, the spread of this kind of attitude beyond a small group of rich-and-worried is a sign of potential trouble. Which is why the surge in negative-yielding European bonds is worth watching. In a healthy economy with lots of profitable opportunities, few investors have an interest in, say, a government bond yielding -0.3%. Europe is clearly not that kind of place anymore, as the outstanding amount of negative-yielding government bonds is up by 20% this year to about $10 trillion. That’s the highest since 2016, when the ECB was depressing rates by snapping pretty much every available eurozone sovereign bond. Now QE has been scaled back but interest rates are still plunging. And it’s not just government bonds. Brand-name European companies like Sanofi SA and Moet Hennessy also have outstanding bonds that trade with negative yields. |
| No Holds Barred: 2020 Candidates Demand Resignation As Dems Spew Fire And Brimstone During Dramatic HearingUpdate 15: After Harris, Graham said he was going to one last go-round and give lawmakers a chance to ask follow-ups before calling the hearing to a close, which he did around 3:15 pm ET. First, it appears all the Senators running for president who weren’t present at the hearing (or at least those who aren’t polling near the top of the pack), felt obligated to call on Barr to resign via Twitter.
And even some of Barr’s interlocutors joined in the fun.
During the second round, Dick Durbin, Amy Klobuchar and – of course – Richard Blumenthal decided to ask follow-up questions including lobbing questions about whether Mueller probed President Trump’s taxes (Barr couldn’t say), to whether Barr should recuse himself from DoJ’s prosecution of Goldman Sachs over its involvement in the 1MDB scandal. Asked by Blumenthal about his conversation with Mueller after the letter was received, Barr said he … |
| Key Words: Right-wing schemer Jacob Wohl on how to profit from politics: ‘Make shit up’Jacob Wohl, right-wing conspiracy theorist and securities fraudster, reportedly tried to raise $1 million this spring by pitching investors on an idea for profiting from the manipulation of political betting websites. |
| Male characters on kids TV shows use STEM skills, female characters use magicLessons from the #MeToo era do not appear to have made their way to children’s television. |
| Everything coming to Netflix in May — and what’s leaving“The Matrix,” “Scarface,” and Netflix original “Knock Down The House” are just a few of the films coming to the streaming service this month. |
Summary of Economic Releases this Week
Earnings Summary for Today
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