Written by Gary
Stocks sharply higher on stimulus hopes but still head for third losing week (SPY +0.9%).
Here is the current market situation from CNN Money | |
European markets are higher today with shares in France leading the region. The CAC 40 is up 0.91% while Germany’s DAX is up 0.89% and London’s FTSE 100 is up 0.51%. |
What Is Moving the Markets
Here are the headlines moving the markets. | |
Futures climb on stimulus hopes, Nvidia resultsU.S. stock index futures rose 1% on Friday, as hopes of more stimulus from central banks helped lift some gloom in what has been a turbulent week for markets. | |
Deere trims earnings forecast on trade war woesDeere & Co.’s third-quarter earnings on Friday missed Wall Street estimates, hurt by the U.S.-China trade war that has dented the demand for its farm machines, forcing the company to revise down its full-year profit and sales growth forecasts. | |
Stocks gain on stimulus hopes but still head for third losing weekWorld stocks rose on Friday as expectations grew of further stimulus by central banks, offsetting worries about slowing economic growth, which intensified this week as the U.S. yield curve inverted for the first time since 2007. | |
Trade tensions and a weaker yuan drive Chinese crypto demand, market players say(This Aug. 14 story corrects spelling of executive’s name in 5th and 9th paragraphs) | |
U.S. 30-year yields drop to record low; 10-year yields sinkU.S. 30-year Treasury yields fell to a record low below 2% and benchmark 10-year notes dropped to a three-year trough on Thursday amid persistent worries about global trade tensions and economic slowdowns around the world. | |
Alibaba and the $15 billion question: Amid Hong Kong’s protests, when to list?Hong Kong’s political unrest is posing a dilemma for Alibaba Group Holding Ltd on the timing of its planned $15 billion listing in the city, with sources saying China’s biggest e-commerce company is now considering several timetables. | |
Oil rises 2% as recession fears recedeCrude oil prices rose more than 2% on Friday, recovering from two days of declines after data showing a rise in U.S. retail sales helped to ease concerns about a recession in the world’s biggest economy. | |
U.S. surfboard makers not so stoked about China tariffsPresident Donald Trump’s decision to slap 10% tariffs on imported surfboards convinced surf executive Sue Bowers to move factory jobs out of China – but not back to the United States, which was one goal of Trump’s tariffs. | |
Invesco thrives in China as former executive Ross leads Trump’s trade warThe former investment company of U.S. Commerce Secretary Wilbur Ross has been flourishing in China, even as he marshals billions of dollars’ worth of punishing tariffs in America’s deepening trade war. | |
Founder Of World’s Largest Hedge Fund Sees ‘40%’ Odds Of Recession Before 2020 ElectionAfter focusing his attention on his new charitable giving initiative involving Connecticut’s schools, Bridgewater founder Ray Dalio is turning his attention back to global markets, and has delivered more of the economic doomsaying that has characterized his media appearances as of late (ever since he warned early last year that any investor holding cash would be left looking like a fool). Dalio believes that “over the next one, two, three years” there will be a turn for the worst that will bring about an environment where there’s more excess capacity, debt restructurings and political issues entering into it. Elections in the US will have an important bearing, he said, as the conflict between capitalists and socialists intensifies political pressures. Pressed for a more specific projection for the timing of the next recession, Dalio said he sees a 40% chance of a recession before the 2020 election – which, in theory, would be bad news for President Trump during his re-election bid. “I think that in the next two years, let’s say prior to the next election, there’s probably a 40% chance of a recession,” he said But are more cuts needed? “Yes, I think you will see greater interest rate cuts as you see the global economy slowing down. I think you’re seeing that led now by the bonds. Long term rates are falling faster than short term rates, and when that happens, it means that cash is more attractive than bonds. So we’re in a situation where there’s a lot of pressure to cut rates. As for fiscal stimulus, Dalio doesn’t think anything will happen on that front, though if Democrats take over, there could be a major rethink on that as the economy sputters. | |
Deere Cuts Guidance For Second Straight Quarter Amid Farmer TurmoilFor those asking this morning if the US-China trade war is hurting the economy – and America’s farmers – look no further than heavy industrial equipment giant Deere which this morning cut its earnings guidance for a second straight quarter and announced a review of costs as U.S. farmers – battered by trade and weather disruptions – were unable to splurge on expensive new tractors. While Deere’s Q3 results were dismal – with the company missing on both the top line, reporting 3Q net sales of $8.97 billion, down -3.4% y/y, and below the estimate of $9.38 billion, and the bottom line, with Q3 adjusted EPS of $2.71 missing estimates of $2.84 – its guidance was worse. Deere cut its net income and its construction & forestry equipment sales forecasts for the full year, with the guidance missing the average analyst estimate. The company now sees FY net income about $3.2 billion, down from $3.3 billion previously, and below the sellside estimate of $3.29 billion. The company also cut its FY construction & forestry equipment sales forecast to +10%, from +11%, and below the +11% estimate. Deere also said it was “conducting a thorough assessment of its cost structure and initiating a series of actions to make the organization more structurally efficient and profitable.” For fiscal 2019, equipment sales are now projected to rise about 4%, with net income forecast at $3.2 billion, the Moline, Illinois-based company said. Three months ago, it predicted 5% equipment sales growth and $3.3 billion profit. And so with fiscal Q3 earnings missing estimates and a sharp guidance cut, Deere shares fell 3.7% in pre-market trading on Friday before recovering some ground. The stock has badly underperformed the S&P since the start of the year. | |
US Futures Surge, Global Markets Rise Amid Lull In Bad NewsIn a quiet end to an extremely tumultuous week (pending one or more shocking Trump tweets) there were no overnight trade war tape bombs from China, no additional curve inversions even as more than half of the world’s yield curves are now inverted…
… and so US equity futures surged and European stocks and most Asian shares posted modest gains on Friday, while Treasuries pared some of their recent blistering advance, taking advantage of the rare moment of quiet, as expectations grew of further stimulus by central banks, offsetting worries about slowing economic growth which intensified this week as the the US 2s10s yield curve inverted for the first time since 2007. S&P 500 futures pushed above prior day’s highs amid renewed trade optimism after U.S. President Donald Trump said a call is planned very soon with Chinese leader Xi Jinping. | |
Blain: These Four Stocks Could Start A Market CrashBlain’s Morning Porridge, submitted by Bill Blain of Shard Capital
Run for the hills..? Nope. How much more horrible does this need to get: Chinese Police Troops poised on the Hong Kong Border? Bond Yields inverted and tumbling lower? Germany sliding into recession? China hiding internal pain? Global Equity threatening to puke completely? Italy government about to fall? Brexit? Trade wars deepening? Political gridlock? Geopolitical uncertainty? A new banking crisis? The outlook looks horrible… but Relax. Just Do It! The sun will likely come up tomorrow. And don’t forget we are right in the Ides of August: the thinnest, most illiquid time of the year. Crashes usually happen in October! We’ve also got a growing awareness from global regulators, central bankers, and politicians of just how badly flawed policy responses and their unintended consequences have been since 2008. None of them want to jeopardize their electoral chances or future careers. If crisis crunches into crash there is the reality of a rescue bailout to factor in. (How is the question – central banks are out of options on rates, so I guess they just buy everything and end the logic of free markets for ever…) Plus, it’s a simple fact there is loads and loads of ready cash sitting waiting for the opportunity to invest on a market reset. When the whole street is waiting for a correction as the moment to buy… It doesn’t happen till you don’t expect it. Let’s not be overly optimistic. There are clearly troubles ahead, but I suspect they are likely to be tactical in the short-run. The risk is a couple of tactical shocks could precipitate a strategic collapse. Le … | |
Canary in the coal mine? Crashing bond yields make D-St tenseCanary in the coal mine? Crashing bond yields make D-St tenseInversion of yield is a phenomenon where long-term bond yield drops below short-term yield. | |
IT firms are going all out to stop attritionIT firms are going all out to stop attritionIT firms are providing better hikes, bonuses and promotions to employees to stem the talent outflow. | |
A stimulus plan for slump by this weekend?A stimulus plan for slump by this weekend?In his meeting with FM Nirmala Sitharaman, Modi has argued for quick alleviation measures. | |
Rail Week Ending 10 August 2019: A Stronger Week But Intuitive Sectors Remain In ContractionWritten by Steven Hansen Week 32 of 2019 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. The economically intuitive sectors rolling averages remain in contraction – and improved. | |
NerdWallet: Scammers get more creative: watch for these new phone and email rip-offsThe IRS impostor is so last year. Look out for password-enabled blackmail and even kidnapping scams. | |
NerdWallet: These apps could be causing you to overspendWhile some apps help you save money, others encourage you to spend more. Watch for these culprits. | |
NerdWallet: This guy paid off $118,000 in loans using his ‘debt tornado’ methodHe channeled his anger against a student loan company into paying off the debt he disliked the most. |
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