Saturday, 25 March 2017

US stocks fall with Trump's health-care bill

Markets were mixed on Friday.

The S&P 500 slipped 0.1 percent, the STOXX Europe 600 fell 0.2 percent but the Nikkei 225 rose 0.6 percent.

US stocks fell after President Donald Trump failed to secure enough votes to pass his health-case bill.

Kate Warne, investment strategist at Edward Jones, said the “inability of the Congress to pass the health-care bill would send a signal that other policies, such as tax reforms may be delayed too.”

Friday, 24 March 2017

Markets mixed, US stocks in “consolidation phase”

Markets were mixed on Thursday.

The S&P 500 slipped 0.1 percent but the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 rose 0.2 percent.

“We think this is a normal pullback and consolidation phase after everything that's happened over the past six months,” said Lisa Kopp, head of traditional investments at US Bank Wealth Management. “The economic data seems to be positive; that's why we are still positive on stocks for the year.”

However, Canaccord Genuity chief market strategist Tony Dwyer thinks that it is not time to buy.

Speaking to CNBC on Wednesday, Dwyer said that “we just want to be market neutral until those things get oversold enough”.

And on Thursday, Todd Gordon of TradingAnalysis.com told CNBC: “The underperformance of the small caps over the last two months coupled with a significant reversal in the Nasdaq makes me very cautious of this market going forward.”

Thursday, 23 March 2017

Markets mixed as US stocks rebound

Markets were mixed on Wednesday.

The S&P 500 rose 0.2 percent but the STOXX Europe 600 fell 0.4 percent and the Nikkei 225 plunged 2.1 percent.

“My feeling is we are running into a period of risk-off sentiment,” said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets.

Nevertheless, the rebound in the US kept some analysts optimistic.

“The market’s decline was relatively short-lived and economic data are amazingly strong, so we are still in a bull market and view this as a buying opportunity,” said Randy Frederick, managing director of Trading & Derivatives at Schwab Center for Financial Research.

In contrast, Kathleen Brooks, research director at City Index, wrote in a note that “the market is sending us some signals that could suggest a deeper pullback is on its way”.

Wednesday, 22 March 2017

Markets fall but investors “not throwing in the towel”

Markets fell on Tuesday.

The S&P 500 fell 1.2 percent, its steepest fall since 11 October. The Dow Jones Industrial Average and Nasdaq Composite fell 1.1 percent and 1.8 percent respectively, their worst declines since September.

Elsewhere, the STOXX Europe 600 fell 0.5 percent and the Nikkei 225 fell 0.3 percent although most other Asian markets rose.

Jack Ablin, chief investment officer at BMO Private Bank, said that investors have lost some of their enthusiasm over President Donald Trump as “a lot of his policies got mired in the legislative process”.

Nevertheless, analysts appear to remain sanguine about stocks.

“Investors are not throwing in the towel but they are resetting their expectations,” said Ablin.

“This doesn’t feel like a selloff, though, at least not at this point,” said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group.

A recent survey of global fund managers by Bank of America Merrill Lynch showed that most respondents thought that higher interest rates will be the most likely catalyst to end the bull market but for now, Treasury yields remain too low to hurt stocks.

Tuesday, 21 March 2017

Markets fall as protectionism risk rises

Markets mostly fell on Monday.

The S&P 500 fell 0.2 percent, as did the STOXX Europe 600.

In Asia, the Shanghai Composite rose 0.4 percent but stocks were mixed elsewhere in the region while the Japanese market was closed.

Over the weekend, finance ministers and central bankers at a G-20 meeting had dropped a pledge against protectionism in a policy statement, a move pushed by the US.

Citigroup economist Ebrahim Rahbari wrote in a research note. “Our base case is still cautiously benign, but we see a major rise in protectionism as one of the main risks to the global outlook.”

Analysts mostly appear to remain sanguine about market prospects though.

“At this stage, sideways or a move lower on the S&P 500 would make sense and perhaps that’s what we are seeing after gains in February,” said Michael Antonelli, equity sales trader at Robert W. Baird & Co.

“We have one of the most business-friendly administrations, which we expect to spur capital spending by companies, leading to better earnings growth,” said Maris Ogg, president at Tower Bridge Advisors.

Monday, 20 March 2017

Oil turns down even as stocks hold up

Notwithstanding a small gain last week, oil has been selling off in recently. From Bloomberg:

The exodus of oil-price optimists has begun.

Money managers cut bets on rising West Texas Intermediate crude by a record amount during the week ended March 14, while wagers on a further price drop doubled as oil remained below $50 a barrel.

In contrast, investors are still waiting for a sell-off in stocks. From MarketWatch:

Investors who have been looking for a big pullback in stocks to scoop up some bargains have been waiting a long time, and they may be waiting even longer to jump into that opportunistic drop if the current trend holds.