Markets rise, S&P 500 hits record high on hopes for more accomodative monetary policy

Markets rose on Thursday.

The S&P 500 rose 0.9 percent to a record high, the STOXX Europe 600 rose 0.4 percent and the Nikkei 225 rose 0.6 percent.

Oil prices surged. West Texas Intermediate crude jumped 5.4 percent and Brent rose 4.3 percent.

Markets rallied after the Federal Reserve removed the word “patient” from its latest monetary policy statement on Wednesday and Fed Chairman Jerome Powell told a press conference that “the case for somewhat more accommodative policy has strengthened”.

Elsewhere, the Bank of Japan also indicated on Thursday a readiness to increase monetary stimulus while the Bank of England cut its UK second quarter growth forecast to zero.

Markets rise as Fed prepares for rate cut, Japanese exports plunge

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.3 percent and the Nikkei 225 surged 1.7 percent. However, the STOXX Europe 600 was flat.

US stocks were boosted by the Federal Reserve's statement after its monetary policy meeting on Wednesday. “The FOMC will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion,” the Fed said in its statement, removing its recent reference to being “patient”.

The Fed also said inflationary pressures have receded, lowering its forecast for PCE inflation in 2019 to 1.5 percent from 1.8 percent, below its 2 percent target.

Kevin Giddis, head of fixed-income capital markets at Raymond James, said that now that the Fed “finally realize that they are not going to see inflation”, a rate cut could come “as early as July”.

However, Mike Loewengart, vice president of investment strategy at E-Trade Financial, said: “Investors would be well served to recognize that a rate cut is not a foregone conclusion, especially given the Fed has limited ammunition in its traditional tools of monetary policy, most notably the federal-funds rates.”

Meanwhile, elsewhere, a report on Wednesday showed that Japan's exports fell 7.8 percent in May from a year earlier, its sixth consecutive declinue.

“For the Bank of Japan and for policymakers, the message is very, very clear: the industrial part of the Japanese economy is in recession, ” said Jesper Koll, senior adviser at WisdomTree Investments.

Markets rise on ECB rate cut hint

Markets mostly rose on Tuesday after European Central Bank Mario Draghi hinted at interest rate cuts.

The S&P 500 rose 1.0 percent while European stocks surged, French stocks in particular soaring 2.1 percent.

Earlier on Tuesday, Asian stocks were also mostly higher but the Nikkei 225 fell 0.7 percent.

Oil prices surged. West Texas Intermediate crude rose 3.8 percent and Brent rose 2.0 percent.

“Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools,” Draghi told the ECB's annual economics gathering in Sintra, Portugal.

“Super Mario is back!” said IG analyst Chris Beauchamp in summary at the market action.

A tweet by US President Donald Trump on Tuesday that there will be an “extended meeting” with President Xi Jinping of China at the Group of 20 meeting in Japan also helped boost investor sentiment.

Still, Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, warned: “If the Fed doesn’t appear sufficiently dovish – including taking the word “patient” out of their statement – or the G20 meeting doesn’t result in significant progress in the trade war with China, then the market could experience a sharp pullback.”

On the other hand, investors may already have been positioned for the worst and markets ripe for a rally anyway. A recent survey by Bank of America Merrill Lynch had shown that fund managers “have not been this bearish since the Global Financial Crisis”.

Markets little-changed as investors look for rate cuts

Markets were little-changed on Monday.

The S&P 500 rose 0.1 percent, the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 was flat.

US economic data on Monday disappointed.

The Empire State manufacturing index plummeted 26.4 points to minus 8.6 in June, a record decline. Economists had expected a reading of plus 10.

The National Association of Home Builders's home-builder confidence index fell two points to 64 in June, worse than economists’ consensus forecast of a one-point increase.

The data would have added to concerns of slowing economic growth in a week when the Federal Reserve is due to meet on monetary policy.

Mark Newton, technical analyst at Newton Advisors, wrote in a research note that “while a lowering of rates has not been priced in by the market for Tuesday, such a move is expected by July, and failure to do so would be a surprise to markets”.

Recession could be rough for markets with heavy investor weighting in risky assets

The S&P 500 closed at 2,886.98 last week. It rose 0.5 percent over the week for its second consecutive weekly gain.

Ed Clissold, chief US strategist at Ned Davis Research, told CNBC last week that as long as the economy does not fall into a recession, “the market’s in pretty good shape”.

Clissold said that “2950 is in line with what you’d expect over the long run from the S&P”.

While he said that “it’s going to be a choppy market from here”, he added that pullbacks could be “opportunities to get in at a little bit more attractive prices as we go for the next few months”.

However, Clissold also warned that “if we start spiraling towards a recession, if we get too far gone, a couple rate cuts isn’t going to be enough to pull us out and then it could be a much rougher situation”.

A recession should indeed be a concern after Morgan Stanley reported last week that its Business Conditions Index fell by 32 points in June to 13, the largest one-month decline on record and the lowest level since December 2008 during the financial crisis.

A recession could be particularly devastating with fund investors already weighted heavily toward risky assets.

According to analysts at Société Générale, positions in equity and credit accounted for 64 percent of the investment pool covered by flow-tracker EPFR Global on a monthly basis. According to the analysts, this represents 90 percent of the maximum historical level.

This heavy weighting could be why the US stock market is now priced so high that, according to Jesse Felder of the Felder Report (via MarketWatch), investors “are likely to receive essentially nothing in return in the coming decade”.

Felder estimated the future return by comparing the total value of the stock market against the overall size of the economy, what he called the “The Buffett Yardstick”.

Felder also used margin debt as an indicator of how speculative the market has become and found “it hitting a new record high over the past couple of years”.

“In all, long-term investors are risking roughly a 60% decline to try to capture a 0% rate of return over the coming decade in the stock market, one of the worst risk-to-reward setups in history,” he concluded.

Markets fall as Gundlach sees bigger chance of US recession

Markets mostly fell on Friday.

The S&P 500 fell 0.2 percent and the STOXX Europe 600 fell 0.4 percent. However, the Nikkei 225 rose 0.4 percent.

Economic data on Friday were mixed, with US retail sales rising 0.5 percent in May and industrial production rising 0.4 percent, but the University of Michigan’s consumer sentiment index falling to 97.9 in June from 100 in May. Also, China's industrial output growth slowed to a more than 17-year low.

Market sentiment was also dented by a Broadcom announcement on Thursday that it had lowered its outlook for the rest of the year, which Tom Martin, senior portfolio manager at Globalt Investments, said “adds to fears about global demand”.

Indeed, DoubleLine Capital Chief Executive Officer Jeffrey Gundlach now sees a bigger chance of a recession hitting the US in the not-too-distant future.

“Several indicators suggest a recession could take place in one year,” Gundlach said on an investor website.

Markets rise, oil jumps

Markets mostly rose on Thursday.

The S&P 500 rose 0.4 percent and the STOXX Europe 600 rose 0.2 percent but the Nikkei 225 fell 0.5 percent.

Energy stocks outperformed after oil jumped 2.2 percent following reports that two oil tankers were damaged in an apparent attack in the Strait of Hormuz.

However, Neil Wilson, chief market analyst for Markets.com, said that “with OPEC already curbing output and U.S. production at a record high the market is far less susceptible to a shock”.

Indeed, Sam Stovall, chief investment strategist of US equity strategy at CFRA, said that “the market doesn’t think the Strait of Hormuz will be closed” and is instead “focusing on the strong economy, rising productivity and low unemployment”.

Markets fall, risk rally “running out of steam”

Markets fell on Wednesday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.3 percent and the Nikkei 225 fell 0.4 percent.

Oil prices plunged, with both West Texas Intermediate crude and Brent falling about 4 percent after a report showed that US crude supplies rose for a second consecutive week.

“Just the thought of overproduction in this deteriorating global economic environment suggests, unless OPEC and allies can bridge the agreement gap, markets will head south in a hurry,” said Stephen Innes, managing partner, Vanguard Markets Pte, in a note.

“The risk rally seems to be running out of steam, and there appears to be little room for further upside,” strategists at Morgan Stanley wrote.

However, for the time being, the S&P 500 remains above its 50-day moving average. According to a CNBC article, since 2009, the index has traded positive 90 percent of the time two weeks after it crossed this threshold.

US stocks give up gains, “rally not fundamentally backed”

Markets were mostly higher on Tuesday.

Early in the day, Asian markets rose, with the Nikkei 225 gaining 0.3 percent and the Shanghai Composite surging 2.6 percent. The STOXX Europe 600 rose 0.7 percent.

However, the S&P 500 gave up early gains to close flat.

Some analysts were probably not surprised by the pullback in US stocks.

“This rally is not fundamentally backed,” said Tom Essaye, founder of The Sevens Report.

While Fed funds futures suggest that traders are pricing in about 60 percent probability of three Fed rate cuts this year, Essaye is not impressed. “If the Fed cuts three times between here and January, this economy is headed for a recession,” he said.

“Our dispute with China is perhaps still the single largest cloud over the market,” said Mike Loewengart, chief investment officer at E-Trade Capital. “The issue is not going away.”

Markets rise after tariffs on Mexico suspended

Markets rose on Monday.

The S&P 500 rose 0.5 percent, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 jumped 1.2 percent.

Markets were relieved after US President Donald Trump tweeted late on Friday that he had suspended plans to impose tariffs on Mexico after reaching a deal with that country over stemming the flow of illegal immigration.

While noting that trade concerns remain between the US and China, Yousef Abbasi, global markets strategist at INTL FCStone, said that “the market has really shown its ability and wherewithal to place a bet on the strength of the Fed put”.

However, Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, said that “we are not confident that rate cuts can cure what ails the economy”.

Early on Monday, China released mixed data on trade, with exports rising 1.1 percent in May from a year earlier but imports plunging 8.5 percent.

Another report on Monday showed that the UK economy contracted by 0.4 percent in April after a 0.1 percent decline in March as manufacturers closed operations in anticipation of the UK's exit from the EU.

Markets rise as fall in US job growth may restart “cheap money train again”

Markets rose on Friday.

The S&P 500 rose 1.1 percent, the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 rose 0.5 percent.

Markets shrugged off a report that the US economy created just 75,000 new jobs in May, well below the 185,000 estimated by economists surveyed by MarketWatch.

Mike Loewengart, vice president of investment strategy at E-Trade, wrote that the report “supports the argument for cutting rates beyond politics or trade issues”.

“That said, our historically low unemployment rate hasn’t moved,” he added. “So the Fed will have to walk a really thin line.”

Still, Sven Henrich, founder and lead market strategist of NorthmanTrader.com, thinks that the Federal Reserve and other global central bankers are “hapless and scared” and likely to “embark on the same cheap money train again”.

Markets mixed, ECB to keep rates on hold until 2020

Markets were mixed on Thursday.

The S&P 500 rose 0.6 percent but the STOXX Europe 600 and the Nikkei 225 were flat and the Shanghai Composite fell 1.2 percent.

The European Central Bank left interest rates unchanged on Thursday and extended the period it expects rates to remain on hold through at least the first half of 2020.

However, some analysts were unimpressed.

“Instead of taking a rate increase off the table, it instead decided to simply push the first hike further out. Head still in the sand,” said Neil Wilson, chief market analyst at Markets.com, in a note.

Still, Paul Brigandi, co-head of portfolio management and head of trading at Direxion, suggested that the “more dovish stance from the ECB today and the Fed earlier this week” may have “kind of balanced” investors' concerns over trade.

Markets rise on Fed rate cut hope

Markets rose on Wednesday.

The S&P 500 rose 0.8 percent, the STOXX Europe 600 rose 0.4 percent and the Nikkei 225 surged 1.8 percent.

“The flexibility of the Fed if needed to cut rates has set the stage for another positive trading session,” wrote Peter Cardillo, chief market economist at Spartan Capital, in a note, referring to Federal Reserve Chairman Jerome Powell's hint at a possible rate cut on Tuesday.

A chart by Barclays shows that between 1974 and 2007, the S&P 500 has gained an average 2.8 percent six months after a Fed cut and 6.7 percent a year after the cut.

However, stocks in Europe were held back by an announcement by the European Commission on Wednesday that disciplinary proceedings against Italy are warranted due to its rising public debt

US stocks surge as Fed officials hint at rate cut

Markets were mostly higher on Tuesday.

The S&P 500 surged 2.1 percent and the STOXX Europe 600 rose 0.6 percent but the Nikkei 225 finished flat.

US stocks were boosted by Federal Reserve Chairman Jerome Powell's comment at a monetary policy conference that the central bank would “act as appropriate” to sustain the economic expansion in the face of trade disputes.

Powell’s remarks followed St. Louis Fed President James Bullard's on Monday that rate cuts “may be warranted soon” amid the trade disputes.

But as far as rate cuts are concerned, the Reserve Bank of Australia has gotten a head start. It lowered its benchmark interest rate by a quarter of a percentage point to 1.25 percent, its first rate cut in nearly three years.

Markets mixed amid weak manufacturing PMI data

Markets were mixed on Monday.

The S&P 500 fell 0.3 percent and the Nikkei 225 fell 0.9 percent but the STOXX Europe 600 rose 0.4 percent.

Recent economic data suggested weakening global economic growth, with factory activity contracting across Asia and Europe last month.

US manufacturing continued to grow in May, although the Institute for Supply Management’s manufacturing PMI did fall to 52.1 from 52.8 in April.

Bill Stone, chief investment officer at Avalon Advisors LLC, warned in a note that if all the contemplated tariffs against China and Mexico are implemented, it “could knock as much as 1 percentage point off U.S. GDP”.

After first monthly decline of year, US stocks “clearly oversold”

The S&P 500 fell 2.6 percent last week, completing a 6.6 percent decline for the month of May, its first monthly decline of 2019.

A CNBC article, however, noted that the drop in May is normal for stocks.

The article cited Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, as pointing out that 5 percent pullbacks in the S&P 500 have happened in 65 of the past 70 years.

Indeed, some analysts remain sanguine.

Sam Stovall, chief investment strategist at CFRA Research, said that “hefty” gains in the S&P 500 between January and April are “typically digested” in May, which is then followed by solid gains in June.

Craig Callahan, president at Icon Funds, said: “We’re clearly oversold and we’re finding good value.”

Still, LPL Financial noted that the S&P 500 has dropped more than 5 percent in May just four times in the past 50 years. Subsequently, the index has lost more than 5 percent in June on two occasions.

Markets fall as Trump raises tariff on Mexican imports

Markets fell on Friday.

The S&P 500 tumbled 1.3 percent, the STOXX Europe 600 fell 0.8 percent and the Nikkei 225 plunged 1.6 percent.

Investor sentiment took another hit after US President Donald Trump announced late on Thursday that the US would impose a 5 percent tariff on all goods from Mexico until that country stops the flow of illegal immigrants into the US. Tariffs will rise in steps up to 25 percent subsequently “unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” said Trump.

The move on Mexico added to trade tension between the US and China that continues to escalate, with Hu Xijin, the editor of the Global Times, writing that “China will take major retaliative measures against the US placing Huawei and other Chinese companies on Entity List”.

John Bellows, a portfolio manager at Western Asset Management, said that while the economic impacts from the trade tensions are likely to be transitory and manageable, “if sentiment continues to deteriorate then that itself can become a more serious issue”.

Tom Essaye, founder of Sevens Report Research, said that foreign governments could choose to “simply wait Trump out given we’re 19 months from an election”. That would increase the chances of a recession, he added.

Markets mixed, US first quarter GDP revised down

Markets were mixed on Thursday.

The S&P 500 rose 0.2 percent while the STOXX Europe 600 rose 0.4 percent but the Nikkei 225 fell 0.3 percent.

The US Commerce Department revised down its estimate of first quarter GDP growth to a 3.1 percent annualised rate from 3.2 percent.

Colin Cieszynski, chief market strategist at SIA Wealth Management, said that the downward revision was “widely expected, but core personal consumption was revised down to 1.0%, below the 1.3% street estimates.”

Cieszynski said that “there’s no pressure on the Fed to raise rates any time soon, perhaps not at all this year”.

US-China trade tensions remain palpable, with Chinese Vice Foreign Minister Zhang Hanhui saying that provoking trade disputes is “naked economic terrorism”.

“We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!” the People’s Daily said in a commentary piece.

US on “recession watch”, stocks “may be subject to further adjustment”

Markets fell on Wednesday.

The S&P 500 fell 0.7 percent, the STOXX Europe 600 tumbled 1.4 percent and the Nikkei 225 fell 1.2 percent.

Market sentiment was weighed down by comments in Chinese newspapers that it could squeeze its supply of rare earth elements to hit the US.

Meanwhile, the global economy may already be headed for a downturn.

George Saravelos, global head of FX research at Deutsche Bank, wrote in a note: “Stock prices of the semiconductor sector tend to lead the global manufacturing PMI by one to two months and yesterday made a new low.”

Indeed, the US 10-year Treasury yield has fallen about 30 basis points since 30 April and now trades at its lowest since September 2017.

The movement in US Treasuries contributed to Morgan Stanley announcing on Tuesday that it is now “‘in the zone’ for a recession watch”.

While the US stock market has been relatively resilient in the face of the US-China trade tension, Brett Arends at MarketWatch noted that the S&P 500 is now “just a few points away” from its 200-day moving average. Arends suggested that the index falling to that level “would trigger a closely watched sell signal, potentially setting off a broader alarm, selling pressure and further falls”.

And the European Central Bank said in its latest Financial Stability Review released on Wednesday that “US equity prices look stretched and may be subject to further adjustment”.

Markets mixed, US “not ready” for deal with China, Italy at risk of “doom loop”

Markets were mixed on Tuesday.

The S&P 500 fell 0.8 percent and the STOXX Europe 600 fell 0.2 percent but the Nikkei 225 rose 0.4 percent.

The US-China trade tension continued to be a concern after President Donald Trump said at a news conference in Tokyo on Monday that the US is “not ready to make a deal”, adding that, instead, tariffs on Chinese products could go up “very substantially”.

In Europe, sentiment was affected by a statement by Italian Deputy Prime Minister Matteo Salvini that the European Commission could slap a 3 billion euro fine on the country for breaking EU rules due to its rising debt and structural deficit levels.

“For Italy, the potential for a doom loop is still looming in the background where you have an undesirable connection between the debt possession of the state and the banks,” said Teeuwe Mevissen, senior eurozone market economist at Rabobank.

Markets rise, Trump sees trade deal with Japan “getting close”

Most markets rose on Monday while the US stock market was closed.

The STOXX Europe 600 rose 0.2 percent after results of European parliamentary elections showed strong support for pro-European Union parties.

In Asia, the Nikkei 225 rose 0.3 percent and the Shanghai Composite rose 1.4 percent.

While on a state visit to Japan, US President Donald Trump said Tokyo and Washington were “getting close” to a deal that would address the US trade deficit.

However, Ray Attrill, head of foreign exchange strategy at National Australia Bank, said “there is no expectation a comprehensive trade deal will be struck anytime soon”.

The trade deal that most investors are focused on, though, is that between the US and China, and one analyst thinks that the market is still not accurately pricing in the probability that the trade talks will ultimately fail.

“The market got the wake-up call on May 5, and it hit the snooze button — expecting this to go away with a tweet,” Alicia Levine, chief strategist at BNY Mellon, said on CNBC last week.

“The trade war is turning into a tech war, and this could go on longer. It could be deeper, and it could be harder to come up with a resolution,” she added.

Escalation of US-China trade war could be “buying opportunity” for stocks

The S&P 500 fell 1.2 percent last week, its third consecutive weekly decline as concerns over the US-China trade war continued to plague markets.

“The odds of a deal are rapidly receding,” Yale University senior fellow Stephen Roach told CNBC last week as tit-for-tat tariffs escalated.

Still, some analysts remain sanguine.

Analysts at Goldman Sachs led by chief US economist Jan Hatzius wrote that if the US imposes tariffs on another US$300 billion worth of Chinese imports, stocks could pull back by 4 percent.

However, Goldman's base case is that a trade deal is reached, along with a “staggered reduction” in the current tranche of tariffs, which could be followed by a 4 percent rise in stocks.

Chinese stocks could also gain, according to some analysts.

Dai Ming, a Shanghai-based fund manager at Hengsheng Asset, said that he is “cautiously optimistic that an agreement on trade will eventually be reached between the two nations” and this would create “a buying opportunity both in the short and medium term”.

Markets higher but “could be years” for US and China to reach trade deal

Markets were mostly higher on Friday.

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

Markets largely shrugged off UK Prime Minister Theresa May’s resignation as Conservative party leader after she had failed in a final attempt to win parliamentary support for her deal on the UK's exit from the European Union.

Markets may have reacted favourably to US President Donald Trump's comment on Thursday that the US could ease its ban on Huawei as “some part” of a wider trade deal with China, with Deutsche Bank Research analysts saying that it showed that “he remains amenable to a broad deal”.

Still, analysts at ANZ Research said that since both sides “will only negotiate on their own terms, it could be years before the two powers can find sufficient common ground”.

Markets fall as trade tension “likely to linger”

Markets fell on Thursday.

The S&P 500 fell 1.2 percent, the STOXX Europe 600 fell 1.4 percent and the Nikkei 225 fell 0.6 percent.

“Markets are pricing in the harsh reality that trade tension is more likely to linger than quickly be resolved as had been the consensus expectation anchoring sentiment until late April,” said Alec Young, managing director of global markets research at FTSE Russell.

However, Brian Belski, chief investment strategist at BMO Capital Markets, thinks that the market has overreacted to the US-China trade dispute.

Belski said in a recorded presentation to clients on Wednesday that even as stock prices have fallen, revenue and earnings estimates “have not changed at all” and advised clients to “stay invested”.

Markets lower, may be “extremely oversold”

Markets were mostly lower on Wednesday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 fell 0.1 percent and the Shanghai Composite fell 0.5 percent.

“Sentiment remains fragile as investors digest the changing face of the trade dispute from broad sweeping tariffs to direct action against single Chinese companies,” Jasper Lawler, head of research at futures brokerage London Capital Group, wrote in a note.

One analyst sees hopeful signs for stocks though.

“A couple of the indicators that I look at got extremely oversold early last week and continue in that direction,” said former Goldman Sachs and Cowen market technician Helene Meisler on CNBC.

Meisler said that “in the first half of last year we had four such instances where we had extreme readings, and each time the market rallied”.

Stocks make a comeback but bonds point to trouble ahead

Markets rose on Tuesday, with the S&P 500 rising 0.9 percent.

“The market is responding to the Trump administration backpedaling a bit on Huawei, which suggests that we are moving toward rather than away from a trade agreement, and that’s what the market wants to hear,” said Crit Thomas, global market strategist with Touchstone Investments.

Deutsche Bank's head of asset allocation and chief equity strategist Binky Chadha sees more gains ahead for the stock market, telling CNBC on Tuesday that he is keeping the S&P 500 target at 3,250.

However, while the stock market is making a comeback, a CNBC report noted that the bond market is pointing to more trouble ahead, with the US 10-year Treasury yield trading about 40 basis points below its 2019 high and within 10 basis points of its year-to-date low.

Dave Haviland, managing partner at Beaumont Capital Management, pointed out that transports, small caps and mid-cap stocks have not hit record highs this year while “outflows from stocks and inflows to bonds is another sign that bonds have been sending the right message, not stocks”.

Markets fall as Huawei ban raises US-China tension

Markets were mostly lower on Monday.

The S&P 500 fell 0.7 percent while the STOXX Europe 600 tumbled 1.1 percent.

In Asia, the Shanghai Composite fell 0.4 percent but the Nikkei 225 rose 0.2 percent.

Market sentiment was shaken by another escalation in US-China trade tension after US tech companies were reported to have begun to comply with the government’s ban on the supply of software and hardware to China’s Huawei Technologies.

Also, CNBC reported that scheduling for the next round of trade negotiations is “in flux” because it is unclear what the two sides would negotiate.

“The rally at the back end of last week is starting to look like a relief rally, and this move could be the beginning of the next major move lower,” David Madden, market analyst at CMC Markets UK, wrote in a note.

Yardeni: Stocks to move higher

The S&P 500 fell 0.8 percent last week, its second consecutive weekly decline.

The decline in stocks over the past two weeks has mostly been attributed to the escalation of the trade war between the US and China as the former threatened and subsequently implemented increased tariffs on imports from the latter.

However, Edward Yardeni, president of Yardeni Research, sees the stock market resuming its rally before long.

“I think it moves higher partly because there’s a recognition that even companies that do business with China are going to find ways to deal with this escalating trade tension like moving some of their supply chains to other countries,” said Yardeni on CNBC.

Yardeni thinks that the “trade escalation is probably going to be more of a negative for China than it is for the United States”, so the former “desperately need a deal much more so than we do”.

“I think a deal will be struck and probably by the end of this summer, if not before then,” he added.

Markets fall as US-China trade suffers “severe negotiating setbacks”

Markets mostly fell on Friday.

The S&P 500 fell 0.6 percent and the STOXX Europe 600 fell 0.4 percent.

In Asia, the Nikkei 225 rose 0.9 percent but the Shanghai Composite plunged 2.5 percent.

Tension between the US and China was raised after an executive order by the Trump administration, aimed at banning Huawei equipment from US networks, took effect on Thursday.

A spokesman for China’s Ministry of Commerce called the Trump administration’s recent moves to raise tariffs on Chinese imports “bullying behavior” that has resulted in “severe negotiating setbacks”.

Charalambos Pissouros, senior market analyst with JFD Group, said that “we are still reluctant to trust a long-lasting reversal in risk appetite” and “cannot assume that the worst is behind us”.

Markets rise after reprieve on car tariffs

Markets were mostly higher on Thursday.

The S&P 500 rose 0.9 percent and the STOXX Europe 600 jumped 1.3 percent.

However, Asian markets were mixed, with the Nikkei 225 falling 0.6 percent but the Shanghai Composite rising 0.6 percent.

Asian markets were rattled by US President Donald Trump's order to ban telecom equipment from countries considered “foreign adversaries”, in a move apparently targeted at China’s Huawei Technologies, but other markets largely shrugged it off.

“After the damaging trade war escalation that dominated either side of the weekend, the markets were granted a reprieve on Wednesday as reports came out suggesting the U.S. was prepared to delay tariffs on cars from Europe and Japan,” wrote Connor Campbell, financial analyst at SpreadEx, in a note.

Markets rise amid US-China “squabble” and disappointing economic data

Markets rose on Wednesday.

The S&P 500 rose 0.6 percent and the STOXX Europe 600 rose 0.5 percent.

Earlier in Asia, the Nikkei 225 rose 0.6 percent while the Shanghai Composite jumped 1.9 percent.

Markets apparently took consolation after US President Donald Trump on Tuesday described the trade dispute with China as a “squabble” and repeated expectations for a positive meeting with Chinese leader Xi Jinping next month in Japan.

However, investors would also have noted some disappointing economic data on Wednesday.

US retail sales fell 0.2 percent last month compared with expectations for a 0.1 percent increase.

Andrew Hunter, senior US economist with Capital Economics, said that this decline “supports our view that GDP growth is set to slow in the second quarter”.

And in China, industrial production in April increased 5.4 percent year-on-year compared to expectations for a 6.5 percent year-on-year increase while retail sales grew at the slowest pace since May 2003.

Heng Koon How, head of markets strategy at UOB, described these reports as “depressing and disappointing”.

Markets rise as trade deal expected but “prolonged conflict could put a serious dent on economy”

Markets were mostly higher on Tuesday.

The S&P 500 rose 0.8 percent while the STOXX Europe 600 rose 1.0 percent.

Earlier in Asia though, the Nikkei 225 fell 0.6 percent and the Shanghai Composite fell 0.7 percent.

While the US-China trade dispute continues, Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, said that the market still believes that “a trade deal gets done” and that “the Fed is there to put a bottom in the market”.

However, analysts at Danske Bank wrote in a note that “our concern is that it will require financial stress to create the necessary pressure to get the deal done”.

Indeed, Steve Goldstein at MarketWatch suggested that at the moment, China seems happy to walk away from trade talks.

“That’s the upshot after China first rolled back some concessions — prompting a new escalation in tariffs — and then showed up to Washington without any other compromises,” wrote Goldstein

The escalation of the trade war could turn nasty, wrote Jeff Cox at CNBC.

Cox noted that the “New York Fed’s gauge of recession probability over the next 12 months is now at 27.5%, easily the highest since the financial crisis” and suggested that “a prolonged conflict could put a serious dent into the economy of both nations, and reverberate through a global picture that at best looks tenuous”.

In contrast, Brett Arends at MarketWatch remains sanguine, saying that the tariff “amounts involved are trivial”.

Michael Brush at MarketWatch wrote that a trade deal is still “very likely to get wrapped up over the next few weeks” and that “it is time to get more aggressive about re-deploying any cash you may have raised in early May”.

Markets tumble as China announces retaliatory tariffs

Markets fell on Monday.

The S&P 500 plunged 2.4 percent, the STOXX Europe 600 tumbled 1.2 percent and the Shanghai Composite sank 1.2 percent.

Markets fell as China announced that it would impose retaliatory tariffs on US$60 billion in imports from the US with new or expanded duties that could reach 25 percent.

“On the heels of 2019’s historic rally, valuations are no longer depressed, making it harder for equities to shrug off looming macro risks,” wrote Alec Young, managing director of global markets research at FTSE Russell. “With the ultimate trade outcome inherently uncertain and difficult to model or predict, investors are selling first and asking questions later.”

Markets at risk of correction as US-China trade war escalates

Markets fell last week as tensions rose after US President Donald Trump threatend to raise tariffs on US$200 billion worth of Chinese goods from 10 percent to 25 percent, a threat that was subsequently carried out on Friday.

The S&P 500 fell 2.2 percent last week while the STOXX Europe 600 fell 3.4 percent.

Talks to resolve the trade dispute between the US and China ended without agreement.

Calculations by Oxford Economics indicated that the latest tariff hike by the US on Chinese goods, together with a likely retaliatory move by China, would reduce US gross domestic product by 0.3 percent in 2020 and Chinese output by 0.8 percent. The global economy would see a 0.3 percent hit.

Markets could sink if the US-China trade war gets worse.

"If the deal totally falls apart, we think there's a pretty big chance of a market correction," said Ryan Detrick, senior market strategist at LPL Financial. He suggested that US stocks could fall as much as 5 percent over the next month and even more elsewhere.

Markets shrug off tariff increase

Markets mostly rose on Friday.

The S&P 500 rose 0.4 percent and the STOXX Europe 600 rose 0.3 percent.

Earlier in Asia, the Nikkei 225 fell 0.3 percent but the Shanghai Composite surged 3.1 percent.

Markets appear to have mostly shrugged off the actual initiation of increased US tariffs on China imports.

“Given how much markets have corrected over the past few days, you would expect some short covering,” said Ken Wong, Asia equity portfolio strategist at Eastspring Investments.

“Despite the tariff increase, the outlook for a trade deal in the relatively near future remains cautiously optimistic,” wrote Tom Essaye, president of the Sevens Report, in a note.

Still, Nick Marro, analyst at the Economist Intelligence Unit, said that the potential for a deal “has gone down significantly”.

Allan von Mehren, chief analyst and China economist at Danske Bank, wrote: “A trade deal getting less likely in Q2 after Trump’s moves today...hopefully we can get a short break from Trump’s tweets and enjoy spring time instead.”

“If things do escalate then this will have an impact of around 0.5 percentage points of global GDP and that would not be inconsiderable,” said Julian Mayo, chief investment strategist at investment management firm Fiera Capital.

Markets fall amid concerns of “disastrous outcome” of US-China trade talks

Markets fell on Thursday.

The S&P 500 fell 0.3 percent, the STOXX Europe 600 plunged 1.7 percent, the Nikkei 225 fell 0.9 percent and the Shanghai Composite tumbled 1.5 percent.

The trade tension between the US and China continued to weigh on markets after US President Donald Trump claimed on Wednesday that China “broke the deal”.

Chris Rupkey, managing director and chief financial economist at global financial group MUFG, warned that an increase in US tariffs on China imports “spells disaster for the U.S. economy”.

Edward Moya, senior market analyst at Oanda, said that “a disastrous outcome this week...could see a 10% correction with U.S. equities” while a “framework agreement is likely to see stocks attempt another run at making fresh record highs”.

Moya said that “the base case remains for a deal to be reached”.

Still, David de Garis, a director and senior economist at National Australia Bank, wrote in a note that the negotiation “could easily go pear-shaped again”.

Markets mixed, Chinese exports fall as all-out trade war looms

Markets were mixed on Wednesday.

The S&P 500 fell 0.2 percent and the Nikkei 225 tumbled 1.5 percent but the STOXX Europe 600 rose 0.2 percent. The Shanghai Composite resumed its slide, falling 1.1 percent after a slight rebound on Tuesday.

Worries over the US-China trade dispute lingered, especially after China reported that its exports fell 2.7 percent in April from a year earlier.

“The outlook for Chinese exports is challenging. If Trump follows through on his latest tariff threats, we think this would drag down export growth by two to three percentage points,” Capital Economics said in a research note.

And things could get worse for China and possibly, the rest of the world, as a CNBC report suggested that an all-out trade war is about to begin.

“Fasten your seatbelt and don't hold your breath,” Bank of America strategists wrote.

Markets fall, increased US tariffs on China could be “final nail in coffin” for bull run

Markets mostly fell on Tuesday.

The S&P 500 plunged 1.7 percent, the STOXX Europe 600 tumbled 1.4 percent and the Nikkei 225 fell 1.5 percent.

The Shanghai Composite rebounded 0.7 percent after having fallen 5.6 percent on Monday.

The trade tension between the US and China remained the main concern after US officials confirmed that tariffs on goods from China could be raised by the end of the week.

“Implementation of the increased tariff levels on Friday could be a final nail in the coffin for these trade talks as well as the equity bull run which we’ve seen since the beginning of the year,” analysts at Rakuten Securities Australia wrote.

Some analysts remain hopeful of a successful outcome to the trade talks.

“I think it’s too early to get so pessimistic, but a lot of investors are,” said Craig Callahan, president of Icon Investments.

“The likelihood the Fed cuts rates if the trade talks collapse is probably the reason the market will hang in better than it should given that the Chinese just upped the ante this morning,” said Ian Winer, advisory board member of Drexel Hamilton.

Markets fall on Trump threat to raise China tariffs

Markets fell on Monday.

Early in the day, Asian markets fell sharply after US President Donald Trump tweeted on Sunday that he would raise tariffs on US$200 billion worth of Chinese goods from 10 percent to 25 percent this week. The Shanghai Composite plunged 5.6 percent.

European markets followed Asian markets lower, the STOXX Europe 600 declining 0.9 percent.

However, the S&P 500 managed to recover from early sharp losses to finish 0.5 percent lower.

Many analysts see Trump's threat as merely part of negotiation tactics and think that a deal will still be reached.

“I don’t think it’s a setback at all. It’s all sort of a posturing position,” said Patrick Palfrey, senior US equities strategist at Credit Suisse.

“The President’s negotiating tactics may be unconventional but the likelihood of some kind of deal is still higher than nothing getting done,” writes Tobias Levkovich, chief US equity strategist at Citigroup.

US recession fears have faded but “the business cycle’s not dead”

The Economist noted last week that fears of a recession in the US have faded.

It noted that the probability of a recession within 12 months based on a model from economists at JPMorgan Chase had fallen from 65 percent at the end of last year to 15 percent on 29 April.

“It’s eye-popping how quickly the narrative has changed,” the article quoted Torsten Slok of Deutsche Bank as saying.

One analyst whose narrative has not changed, though, is Gluskin Sheff chief economist and strategist David Rosenberg.

In an interview with CNBC last week, Rosenberg said that “what investors have to know is that the business cycle’s not dead and that a recession is out there probably sooner rather than later”.

Markets jump with US employment, “buy stocks even at new highs”

Markets rose on Friday. The S&P 500 rose 1.0 percent while the STOXX Europe 600 rose 0.4 percent.

Markets were boosted by a report showing that the US economy added 263,000 new jobs in April. The unemployment rate fell to 3.6 percent, a 49-year low.

“This is another loud and clear signal that the economy is in really good shape,” wrote Mike Loewengart, vice president of investment strategy at E*Trade Financial Corp.

Fed Vice Chairman Richard Clarida said in a speech that the US economy “is in a very good place” with low unemployment and “muted” inflation.

“Solid jobs gains shows U.S. resilience and further strengthens case to buy stocks even at new highs,” said Thomas Lee, co-founder of Fundstrat.

Still, Bob Pisani at CNBC had suggested earlier on Friday that stocks are getting pricey, with the forward earnings multiple for the S&P 500 over 17 when the historic norm is 15 to 16, and could be hitting resistance.

“A lot of things have to go right for the market to keep going up,” UBS’ Art Cashin was quoted as saying.

Markets fall, “time to turn cautious on stocks”

Markets were mostly lower on Thursday.

The S&P 500 fell 0.2 percent and the STOXX Europe 600 fell 0.6 percent but in Asia, the Hang Seng rose 0.8 percent.

Tom Essaye, president of the Sevens Report, said that after the Federal Reserve meeting on Wednesday, investors were “left with a market lacking a material, positive catalyst at the moment and one at the top of reasonable valuations”, and added that “this market could at best churn sideways, or even see a mild pullback”.

Indeed, Morgan Stanley analysts think that a melt-up in the stock market is unlikely at this point. “Large moves from a high starting point (a melt-up) are rare and unlike today usually follow a period of subdued returns and good earnings growth,” the analysts wrote.

However, the analysts also wrote that “hitting our equity strategists’ S&P 500 bull case of 3,000 is likely”.

In contrast, Michael Brush wrote on MarketWatch that it is “time to turn cautious on stocks”.

“Sentiment is getting rich,” he wrote, while “fewer stocks are participating”.

“This combination — investor complacency plus narrowing market breadth — often shows up ahead of a nice pullback. Plus we are moving into the seasonally more volatile time of the year,” he wrote.

US stocks fall as Powell sees “no strong case” for rate cut

The S&P 500 fell 0.8 percent on Wednesday. Most other major markets were closed for holiday.

The Federal Reserve left its benchmark interest rate unchanged after its monetary policy meeting on Wednesday, noting a recent decline in inflation even as the economy continues to grow “at a solid rate”.

However, Powell said the slackening in price pressures appears to be “transient” and said he saw “no strong case” for expecting the central bank’s next move to be a rate cut.

US economic data on Wednesday were mixed.

ADP's employment report showed that the economy added 275,000 new jobs in April while Markit's manufacturing PMI rose to 52.6 in April from 52.4 in March.

However, the Institute for Supply Management's manufacturing index fell to 52.8 in April from 55.3 in March while another report showed that construction spending fell 0.9 percent in March.

US stocks could be headed for “minor correction” but “buy the dip”

Markets were mostly little-changed on Tuesday.

The S&P 500 rose 0.1 percent to eke out another record high but the STOXX Europe 600 was flat. The Shanghai Composite rose 0.5 percent.

“We’re near all-time highs, and investors are waiting for a catalyst to drive the market in the second half,” said Patrick Healey president of Caliber Financial Partners.

Tony Dwyer, equity strategist at Canaccord Genuity, thinks that the market could take a dip first before heading higher.

Dwyer wrote in a Tuesday research note that “the tactical backdrop continues to suggest a minor correction in the near term, with any drawdown limited to 5%”. He added that such a pullback would be “an opportunity to add exposure in the Info Tech, Financial and Industrial sectors”.

Similarly, Citigroup investment strategist Robert Buckland suggested that there are few signs of a bear market and that investors should “buy the next dip”.

US stocks hit another record high “in clear up momentum”

Markets were mostly higher on Monday.

The S&P 500 rose 0.1 percent to another record high and the STOXX Europe 600 rose 0.1 percent. However, the Shanghai Composite fell 0.8 percent.

“The market is in a clear up momentum, and a lack of bad news and upward momentum pushes things higher,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab.

Vishnu Varathan of Mizuho Bank also sees reasons to “maintain optimism through some combination of data buoyancy” but suggested that “equally, there are signs that optimism is stretched”.

Indeed, cautionary data on Monday came from Europe, where the eurozone economic sentiment indicator fell for the tenth consecutive month from 105.6 in March to 104.0 in April, its lowest level in more than two years.

US may avoid earnings recession but concerns remain

The S&P 500 rose 1.2 percent last week to hit a record high, helped by a report on Friday showing that the US economy grew at a faster-than-expected annual rate of 3.2 percent as well as corporate earnings reports that have exceeded expectations.

Indeed, a CNN article suggested that the expected earnings recession is likely to be avoided.

“At the start of first-quarter earnings season, Wall Street analysts expected a decline of 2.5% in per-share profits, according to Credit Suisse. As of Friday morning, that estimate had climbed narrowly into positive territory,” the article said.

The article cited Credit Suisse estimates to say that S&P 500 profits will probably rise by 2.5-3 percent by the end of earnings season.

Nevertheless, the article suggested that “Wall Street isn't out of earnings trouble yet”.

Citing a Bespoke report, the article noted that companies that have beaten earnings estimates have gained less than 1 percent on their earnings reaction days, less than half the average one-day gain of 1.9 percent over the prior two decades, while companies that have missed earnings estimates have declined by an average of 4.6 percent, compared with the historical average of 3.5 percent.

Also, revenue has lagged, with only 54 percent of companies reporting revenues that have beaten estimates.

“That is definitely a concern,” Bespoke wrote.

US stocks hit new record high after GDP report

Markets were mixed on Friday.

The S&P 500 rose 0.5 percent to a record high while the STOXX Europe 600 rose 0.2 percent.

However, earlier in Asia, the Nikkei 225 fell 0.2 percent and the Shanghai Composite tumbled 1.2 percent.

US stocks were boosted by a report that showed that the US economy grew at an annual rate of 3.2 percent in the first quarter.

Mike Loewengart, vice president of investment strategy at E-Trade Financial Corp, wrote that the GDP report shows that the US economy “shot out of the gate big time” in 2019.

Others were not as thrilled by the GDP report.

“The heart of the real economy — private-sector consumption and investment — slowed sharply in the first quarter to a 1.3% annual rate, the slowest growth in nearly six years,” noted Rex Nutting at MarketWatch.

Jason Furman, former economic adviser for President Obama and a professor at Harvard University, said that the underlying data “is consistent with a slowing economy”.

Nevertheless, Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote that “global growth is expected to improve into the second half of the year” and expects “decent gains for share markets through 2019 as a whole”.

Markets mixed as South Korean economy shrinks, small caps lag

Markets were mixed on Thursday.

The S&P 500 was flat while the STOXX Europe 600 fell 0.2 percent.

Earlier in Asia, the Nikkei 225 rose 0.5 percent but the Shanghai Composite plunged 2.4 percent. The KOSPI fell 0.5 percent after a report showed that the South Korean economy shrank 0.3 percent in the first quarter.

In the US, a report showed that first-time jobless benefits surged to 230,000 in the week ended 20 April from 193,000 in the previous week but another report showed that orders for durable goods rose by 2.7 percent in March.

Still, a CNBC report noted that small cap stocks have lagged the S&P 500 recently. The Russell 2000 fell roughly 1 percent since late February even as the S&P 500 rose more than 4 percent.

“The small-cap weakness has become a favorite point of emphasis of the bears,” noted Ed Clissold, chief US strategist at Ned David Research. “From a macroeconomic view, small-caps tend to be more economically sensitive, so under-performance can be a recession warning.”

Markets fall following “rally that no one likes”

Markets fell on Wednesday.

The S&P 500 fell 0.2 percent, the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 fell 0.3 percent.

US 10-year Treasury yields fell 4.9 basis points to 2.522 percent.

The declines came one day after the US stock market hit a new high, which nevertheless failed to provide a significant catalyst for Asian markets on Wednesday.

“Apparently, we are stuck in a stock market rally that no one likes,” said Stephen Innes, head of trading at SPI Asset Management.

And hedge funds could be among those not liking this rally.

A Marketwatch report cited Naeem Aslam, analyst at ThinkMarkets UK, as saying that hedge funds have recently increased bets on a fall in the S&P 500.

“This shows that smart money is ready to bank big if the market falls again,” said Aslam.

US stocks at record high after “really solid earnings reports”

Markets were mostly higher on Tuesday.

The S&P 500 rose 0.9 percent to close at a record high, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.2 percent.

Lindsey Bell, investment strategist with CFRA research, said that potential new closing highs “are being driven by some really solid earnings reports today”.

Colin Cieszynski, chief market strategist at SIA Wealth Management, said that corporate results “indicate an improving world economy”.

Meanwhile, Bob Pisani at CNBC noted that even as the stock market hit new highs, europhia is missing.

“It's not just today, it's been dead for weeks,” he quoted a trader as saying.

“The lack of euphoria or its opposite — the lack of worry — is one reason many traders are enthusiastic about the near-term. It means many are still sitting on the sidelines and they may now be dragged into the markets after seeing the new high headlines,” he concluded.

Markets “in a happy place” amid “cheap and plentiful money”

Markets were mixed on Monday.

The S&P 500 rose 0.1 percent and the Nikkei 225 rose 0.1 percent but the Shanghai Composite tumbled 1.7 percent. Major European stock markets were closed for a holiday.

Oil prices surged after the US declared it would end waivers for countries to import Iranian oil. West Texas Intermediate crude surged 2.7 percent and Brent jumped 2.9 percent.

“With the S&P 500 forward PE (price-to-earnings) ratio sitting near highs of 16.8 and the index 1.2% below its historic record, investors need convincing results to keep buying equities at their current levels,” said Hussein Sayed, chief market strategist at FXTM.

Chinese stocks fell after the Politburo said on Friday that the government would continue to implement a proactive fiscal policy and a prudent monetary policy that is neither too tight nor too loose. Shen Zhengyang, an analyst at Northeast Securities, said that investors interpreted that to mean that “the government will suspend the easing of monetary policy”.

However, Stephen Innes, head of trading at SPI Asset Management, said that a “positive confluence of events continues to support risk sentiment” and that the markets “should remain in a happy place provided the Federal Reserve stays on the dovish course as indeed cheap and plentiful money has a most soothing effect on equity investors”.

Lifelong learning is key to Warren Buffett's success

Lifelong learning may be the secret to Warren Buffett's success, according to his partner, Charlie Munger.

From Tom Popomaronis at CNBC:

As vice chairman of Berkshire Hathaway, Munger says there's one quality of Buffett's that he holds in especially high esteem: His ability to be a lifelong "learning machine."

"If you take Warren Buffett and watched him with a time clock, I would say half of all the time he spends is sitting on his ass and reading," Munger said in his 2007 commencement speech at the University of Southern California.

Buffett himself thinks that taking care of one's mind and body is important, according to Gillian Zoe Segal at CNBC.

"You have only one mind and one body for the rest of your life," Buffett says. "If you aren't taking care of them when you're young, it's like leaving that car out in hailstorms and letting rust eat away at it. If you don't take care of your mind and body now, by the time you're 40 or 50, you'll be like a car that can't go anywhere."

Asian markets rise, slowing global growth a risk

Asian markets finished higher on Friday while major western markets were closed for a holiday.

The Nikkei 225 rose 0.5 percent while the Shanghai Composite rose 0.6 percent.

Meanwhile, the stock market rally remains at risk, said Mark Avallone, founder of Potomac Wealth Advisors.

Avallone said that while accommodative central bank policies around the globe are keeping the stock market rally alive, slowing and uneven global growth is a risk to markets.

"Valuations are reasonable, but absent a catalyst for growth, it appears that the majority of 2019 gains have been realized," he wrote.

Similarly, John Tobey said that economic growth has slowed even as the stock market is rallying.

Tobey suggested that if "growth continues to slow, another bear market leg is a real possibility".

Markets mixed as investors wait for catalyst

Markets were mixed on Thursday.

The S&P 500 rose 0.2 percent and the STOXX Euroipe 600 rose 0.2 percent but the Nikkei 225 fell 0.8 percent.

“A lot of good news has already been priced in to the market, and investors are still in search of the next catalyst to drive stocks higher,” said Michael Arone, chief investment strategist at State Street Global Advisors.

As investors wait for the catalyst, trading volumes in the US have been falling.

Dow Jones Market Data showed that total composite trading volume on Monday was the lowest for a full-day session since 10 September.

Markets mixed as earnings season “not off to a very good start”

Markets were mixed on Wednesday.

The S&P 500 fell 0.2 perent but the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.3 percent.

Tom Essaye, president of the Sevens Report, noted that earnings season in the US “is not off to a very good start”.

Indeed, Lori Calvasina, RBC Capital Markets’ head of US equity strategy, suggested that there may be a little too much euphoria in the US stock market right now.

Calvasina said that “positioning in U.S. equity futures is parabolic, shooting straight up”. She said that peaks in futures contracts last year were followed by selloffs.

“If we’re only getting modest earnings growth this year, S&P 500 only deserves to have modest expansion based on how it is played out the last few times,” said Calvasina.

US stocks could see melt-up after turnaround in investor sentiment and fund flows

Markets rose on Tuesday.

The S&P 500 rose less than 0.1 percent, the STOXX Europe 600 rose 0.3 percent and the Nikkei 225 rose 0.2 percent.

Some analysts see further gains for stocks.

UBS strategists led by Daniel Waldman said that “markets are priced for growth stabilization, but not for acceleration”, and that “leaves room for stocks to run higher”.

“We have a risk of a melt-up, not a meltdown here. Despite where the markets are in equities, we have not seen money being put to work,” said Larry Fink, CEO of BlackRock.

That could be changing. Recent surveys have shown that individual investors have become more bullish and less bearish, with US equity funds seeing US$4.3 billion in inflows in the week ended 10 April after a US$19.7 billion outflow from the start of the year through 3 April.

Markets mixed but entering typically strong period

Markets were mixed on Monday.

The S&P 500 fell less than 0.1 percent while the STOXX Europe 600 rose 0.2 percent.

Earlier in Asia, the Shanghai Composite fell 0.3 percent but the Nikkei 225 jumped 1.4 percent.

“In the absence of any macro news or surprising corporate announcements, markets are trading mostly flat,” said Tom Martin, senior portfolio manager at Globalt Investments.

Still, Patti Domm at CNBC noted that US stocks typically outperform in the two-week period following the 15 April tax filing deadline according to Bespoke Investment Group.

“April seasonally is a strong month,” Paul Hickey, co-founder of Bespoke, was quoted as saying.

US stocks could face “severe” bear market in a recession

The S&P 500 rose 0.5 percent last week, boosted by a 0.7 percent rise on Friday following strong bank earnings reports.

However, asset-management firm Guggenheim warned that the stock market faces a potentially severe bear market in the event of a recession.

“Given that valuations reached elevated levels in this cycle, we expect a severe equity bear market of 40–50 percent in the next recession, consistent with our previous analysis that pointed to low expected returns over the next 10 years,” Guggenheim said in a note last week.

In his April commentary, John Hussman had even more dire projections.

“If I were to offer a guess, I’d suggest that regardless of whether the S&P 500 registers fresh near-term highs, investors should allow for the S&P 500 to be perhaps -30% lower by the end of 2019, on the way to losing an additional -50% of its remaining value over the rest of the down-cycle,” he wrote.

Markets rise amid strong US bank earnings and jump in Chinese exports

Markets rose on Friday.

The S&P 500 rose 0.7 percent, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.7 percent.

Stocks were boosted by strong bank earnings reports in the US.

“Company specific news from major Dow components is helping lift the market,” said Bill Northey, senior investment director at US Bank.

A report from China showing a 14.2 percent jump in exports from a year earlier in March may also have helped.

“Chinese data looks to be the main driver of the gains on Friday,” said Craig Erlam, senior market analyst at Oanda.

Analysts see further gains for S&P 500, history agrees

Markets were little changed on Thursday. The S&P 500 was flat while the Nikkei 225 and STOXX Europe 600 rose 0.1 percent.

“The market is trading at a premium to the historical average,” said Lindsey Bell, an investment strategist at CFRA Research. “We see a little bit of upside from here for the rest of the year, but you’ll see volatility throughout the course of earnings season, for sure.”

Earnings season in the US starts on Friday and while analysts are projecting S&P 500 earnings to fall 4.2 percent year-over-year, they see a seven percent gain over the next 12 months for the S&P 500.

History seems to be on the bull's side.

According to BMO, since 1935, every time the S&P 500 rose 10 percent or more in the first quarter of a year, the market managed to rise 6 percent more on average for the rest of the year, with positive performance during 11 of the 12 times.

The S&P 500 rose 13 percent in the first three months of 2019.

BMO also found that since 1990, when the central bank changed course with its monetary policy, the market rose nearly 10 percent on average from the date of the final rate hike to the date of a rate cut.

Markets rise, Fed “to start cutting interest rates before end of year”

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.7 percent and the STOXX Europe 600 rose 0.3 percent but the Nikkei 225 fell 0.5 percent.

While the minutes of the last Federal Reserve monetary policy meeting released on Wednesday confirmed a wait-and-see stance by the US central bank, inflation data showed that US consumer prices rose 0.4 percent in March, the biggest monthly increase in 14 months.

“I think there’s a bit more inflation beneath the surface than the market has been acknowledging,” said Willie Delwiche, investment strategist with RW Baird.

However, Andrew Hunter, senior US economist at Capital Economics, noted that core inflation fell to a 13-month low and concluded: “We continue to expect that weaker activity growth will convince officials to start cutting interest rates before the end of the year.”

Markets fall as US raises another tariff threat

Markets were mostly lower on Tuesday.

The S&P 500 fell 0.6 percent and the STOXX Europe 600 fell 0.5 percent. However, the Nikkei 225 rose 0.2 percent.

Market sentiment was affected by news that the office of the US Trade Representative has threatened to levy tariffs on many European goods in retaliation against European subsidies for aircraft manufacturer Airbus.

“The tariff threat is probably what’s moving markets negatively,” said Karen Cavanaugh, senior market strategist with Voya Investment Management.

Meanwhile, the IMF lowered the outlook for global economic growth in 2019 to 3.3 percent from 3.5 percent projected in January.

Markets mixed as US readies for earnings season

Markets were mixed on Monday.

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

“There are many skeptics of this bull market, and so when the market goes up a bit as it did last week, they take the opportunity to get out,” said Craig Callahan, president of Icon funds.

Still, Richard Jerram, chief economist at Bank of Singapore, thinks that the US March employment report released on Friday “really killed the fears that people had a month ago” about the US economy, which Jerram said was in “really good shape”.

That said, with the US earnings season starting this week, DataTrek Research’s Nicholas Colas warned that “once you have to face the actual earnings results, I think the story is going to change”.

Will the US bull market continue?

The S&P 500 rose 2.1 percent last week, gaining on Friday for a seventh consecutive session.

Ed Carson at Investor's Business Daily asked whether the US stock market is on the cusp of a long bullish phase.

"Look for the major indexes to convincingly clear their late 2018 peaks," he wrote. "That could happen soon, though the current stock market rally also could face resistance near the old highs. The fate of China trade talks and the upcoming earnings season likely will play a key role over the next few weeks."

Former Goldman Sachs Asset Management Chairman Jim O'Neill is not optimistic though.

O'Neill told CNBC last week that the US market was "definitely not cheap" and "very sensitive" to any bad news.

"We might be entering the end of the 10-year almost clear bull market in equities," he said.

Stocks rise, US jobs report shows recession “not on immediate horizon”

Markets rose on Friday.

The S&P 500 rose 0.5 percent, the STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.4 percent.

US stocks in particular were boosted by a report that showed that the economy gained a better-than-expected 196,000 jobs in March.

Michael Arone, chief investment strategist at State Street Global Advisors, noted that while job growth was better than expected, wage gains showed some moderation. “Investors are relieved that the labor market continues to signal strength without too much wage inflation,” he said.

Charlie Ripley, senior market strategist at Allianz Investment Management, said that “today’s report suggests a recession is not on the immediate horizon”.

Markets mixed, US tariffs on China need to be “rolled back” for further gains

Markets were mixed on Thursday.

The S&P 500 rose 0.2 percent but the STOXX Europe 600 fell 0.3 percent.

Earlier in Asia, the Shanghai Composite rose 0.9 percent but the Nikkei 225 was little changed.

In the US, sentiment was boosted by a report that claims for unemployment benefits fell to 202,000 in the week ended 30 March, the lowest level since 1969.

In contrast, European investment sentiment was weighed down by a report that German factory orders fell 4.2 percent in February.

In Asia, the view that “a US-China trade agreement is virtually a done deal has fuelled optimism,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank, but he warned that “markets may be converging too quickly on the 'done' before the 'deal.'”

“To really give the markets another lift, we need to see some of the existing tariffs, whether it's on the $50 billion or the $200 billion, actually rolled back,” said Rob Subbaraman, head of emerging markets economics at Nomura.

Markets rise on US-China trade deal optimism

Markets rose on Wednesday.

The S&P 500 rose 0.6 percent, the STOXX Europe 600 rose 1.0 percent and the Nikkei 225 rose 1.0 percent.

“Stocks are rallying on hopes for a better-than-expected trade deal as senior U.S. and Chinese officials meet in Washington this week,” said Alec Young, managing director of global markets research at FTSE Russell.

“There will be a deal done this time,” said Sean Taylor, chief investment officer of Asia Pacific at DWS.

However, after ADP reported a lower-than-expected increase of 129,000 private sector jobs for March, Mike Loewengart, vice president of investment strategy at E-Trade, suggested that the job market “is rolling down”.

Indeed, “equities are a turnoff”, said Luca Paolini, chief strategist at Pictet Asset Management, in a note to clients. “With developed economies under pressure and corporate profit growth slowing, prospects for most stock markets look uninspiring.”

“The U.S. stock market looks the most vulnerable to a correction,” he added.

Stocks mixed, valuations “stretched”

Markets were mixed on Tuesday.

The S&P 500 and Nikkei 225 were flat while the STOXX Europe 600 rose 0.4 percent.

Daryl Deke, chief executive officer of New Market Wealth Management, said that “economic growth will continue to be relatively positive, while corporate margins remain high”, but he acknowledged that “valuations are a bit stretched”.

Meanwhile, the drama over the UK exit from the European Union continued as UK MPs failed to vote for an alternative option to Prime Minister Theresa May’s rejected Brexit agreement for the second time.

Wall Street sees no US recession

Wall Street does not expect a US recession within the next year, according to a poll by CNBC.

More than 96 percent of respondents to the survey, who included strategists, investors and traders who appear on CNBC's "Fast Money Halftime Report", said they do not see a recession in the next year, with just about 70 percent saying they are optimistic. Not a single strategist among the 27 respondents had a negative outlook.

However, Moody's Analytics Chief Economist Mark Zandi told CNBC that the global economy is "highly likely" to fall into a recession if the US and China do not reach a trade deal within three months.

Zandi also said that if the UK leaves the European Union without an agreement, "certainly the U.K. economy and the EU economy will be in recession, and I think the rest of the global economy will be not too far behind".

Global recession fears could be overblown, China's manufacturing PMI rises

Jeff Mills, co-chief investment strategist at PNC Financial Services Group, thinks that global recession fears are overblown.

"I think, as we move into the second half of the year, this narrative of global growth potentially causing problems here in the U.S. is going to shift to a stabilization of global growth and then more of a focus on things like earnings," Mills told CNBC last week.

Indeed, a report on Monday showed that the Caixin/Markit China manufacturing PMI rose to 50.8 in March from 49.9 in February.

Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin, wrote that "the situation across the manufacturing sector recovered in March" as "both domestic and external demand rebounded moderately".