Saturday, 21 April 2018

Markets fall amid inflation concerns

Markets fell on Friday.

The S&P 500 fell 0.9 percent, the Nikkei 225 fell 0.1 percent and the STOXX Europe 600 fell marginally.

The US 10-year Treasury note yield rose 4.4 basis points to 2.956 percent, the highest since January 2014.

Kristina Hooper, chief global market strategist at Invesco, said that “Friday’s weakness in stocks suggests that investors sold Treasurys because they are concerned that wage pressures and protectionist policies of the White House administration would send inflation higher”.

“The inflation the Fed so desperately sought for so long has arrived,” said David Rosenberg, chief economist for Gluskin Sheff.

Friday, 20 April 2018

Markets mixed as some see turn in cycle

Markets were mixed on Thursday.

The S&P 500 fell 0.6 percent, the STOXX Europe 600 was flat and the Nikkei 225 rose 0.2 percent.

While earnings have propped up markets recently, some investors are beginning to anticipate a turn in the business cycle.

“There’s a growing fear that the good news we’ve seen over the past years is coming to an end, that we’re closer to a meaningful downturn in the economy than we had previously been expecting,” said Peter Kenny, senior market strategist at Global Markets Advisory Group.

Thursday, 19 April 2018

Markets rise on earnings but some investors think stocks have peaked

Markets rose on Wednesday.

The S&P 500 rose 0.1 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 jumped 1.4 percent.

Naeem Aslam, chief market analyst at Think Markets UK, wrote in anote that fears around a potential trade war and geopolitical concerns “have faded very much”.

“Earnings season in the U.S. has started well,” noted Richard Perry, market analyst at Hantec Markets.

However, findings from Bank of America Merrill Lynch’s monthly survey of fund managers released on Tuesday showed that earnings expectations may have peaked, with a net 8 percent of respondents looking for earnings per share to substantially rise in the next 12 months, down from 35 percent in February.

With the decline in earnings expectations, the amount of cash held by funds jumped to 5 percent in April from 4.6 percent while 18 percent of managers think the stock market has peaked.

Wednesday, 18 April 2018

Markets rise as China growth and US earnings beat expectations

Markets rose on Tuesday.

The S&P 500 rose 1.1 percent, the STOXX Europe 600 rose 0.8 percent and the Nikkei 225 rose 0.1 percent.

Boosting markets was a report showing that China's economy grew 6.8 percent in the first quarter of 2018, beating expectations.

In the US, Mark Luschini, chief investment strategist at Janney Montgomery Scott, noted that corporate reports are showing that “both earnings and revenue are coming in ahead of expectations”.

Still, Wharton finance professor and long-term bull Jeremy Siegel told CNBC on Monday that the “market is going to struggle this year”.

“It's going to be a flat to slightly upward tilting year as good earnings collide with what I think will be higher interest rates both by the Fed and in the Treasury market,” he said.

Tuesday, 17 April 2018

Markets mixed as investors turn attention to earnings

Markets were mixed on Monday.

The S&P 500 rose 0.8 percent but the STOXX Europe 600 fell 0.4 percent. In Asia, the Nikkei 225 rose 0.3 percent but the Shanghai Composite plunged 1.5 percent.

US stocks were supported by good earnings expectations.

“Investors already know that earning will be good and at this point looking at guidance from companies,” said Quincy Krosby, chief market strategist, at Prudential Financial.

Michael Wilson, chief US equity strategist at Morgan Stanley, wrote: “We think first-quarter earnings season should deliver on high expectations and help the market move higher toward a cyclical top in equities we expect to occur later this year.”

Also, a report on Monday showed that US retail sales rose 0.6 percent in March after declining in the previous three months.

Monday, 16 April 2018

Stocks may see more volatility but correction may be nearing end

Nicholas Colas, cofounder of DataTrek Research, thinks that there will be “more volatility ahead” for the stock market.

Using the Dow Theory but focusing more on trade-related stocks, Colas noted in a Bloomberg article that the “trend is not positive”.

Colas wrote that while the Dow Jones Industrial Average is down 1 percent for the year, the S&P 500 is down only 0.4 percent and large-cap technology stocks are up 4.1 percent.

“The Dow is telling us that we’re not out of the woods yet,” he wrote. Stocks that are highly exposed to trade are all “still under pressure” and these, he claimed are the leading indicators of investor confidence.

In contrast, Simon Maierhofer, founder of iSPYETF and publisher of the Profit Radar Report, thinks that the stock market has bottomed.

“In general, big daily swings are always seen near bottoms,” he wrote on MarketWatch.

Maierhofer sees the likelihood of one more new low.

However, he added: “With or without the new low, the weight of evidence suggests this correction is nearing its end.”