August 7, 2017 – Weekly Market Commentary



 

Bloomberg Markets Logo

Dennis Pettit and Alexandria Arnold – Bloomberg Markets
Dollar Drop Adds to Longest Monthly Streak Since 2011

Summary: The dollar wrapped up its fifth consecutive monthly loss, the longest losing streak since 2011. The Euro continues to strengthen as it reached $1.18 for the first time since January 2015. Concerns over US fiscal policies have fueled recent declines in the dollar. 

 

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Stephen Gandel – Bloomberg Gadfly
Trump Trade Tax Goes Cold

Summary: President Donald Trump says cutting corporate taxes is a major priority. However, investors appear to have lost faith in his ability to actually follow through on his ideas. Shares of the 100 S&P 500 companies that stand to benefit the most from a tax cut have been lagging since the House first failed to repeal Obamacare

 

MarketWatch Logo

Jeffry Bartash – MarketWatch
U.S. Adds Impressive 209,000 Jobs in July

Summary:
The US has created nearly 450,000 new jobs in the past two months, pushing the unemployment rate to a 16-year low of 4.3%. Job gains have helped fuel the ongoing economic recovery by stimulating consumer spending. Wage growth remained below its historical average, but the robust labor market should keep the Fed on track to raise rates again before the end of the year.

 

CNBC Logo

Jeff Cox – CNBC
Greenspan: Bond Bubble About to Break Because of Abnormally Low Interest Rates

Summary:
Former Federal Reserve Chairman Alan Greenspan said that the bond market is on the cusp of collapse. Interest rates are abnormally low, he said, and they cannot stay this low forever. Greenspan believes that when rates will begin to rise rapidly. This will lead to a pullback in bonds and stocks as valuation measures weigh on the attractiveness of the stock market.

 

Charles Schwab Logo

Jeffrey Kleintop, Chief Global Investment Strategist
Brad Sorensen, Managing Director of Market and Sector Analysis
Liz Ann Sonders, Chief Investment Strategist

Things are Looking Good… But are They Too Good?

Summary: Earnings have been strong enough to support new highs in the equity markets but the risk of a “melt-up” is rising. Investor optimism has risen to levels which indicate that a pullback would be healthy. On a positive note, US companies are finally starting to spend more on investments and capital expenditures rather than issuing debt and buying back shares. Geopolitical concerns should not be forgotten while the markets climb to new highs, but the Schwab team expects the bull market to continue over the near term.  

 

BlackRock Logo

Rick Rieder – Blackrock 
Dispelling 3 Myths About the Market and Economy

Summary: Several myths have taken hold among market watchers lately relating to the state of the economy, the attractiveness of various asset classes and how the Federal Reserve should be judged in meeting its policy goals. Rieder says that the economy is stronger than many believe, the need for yield will support demand for bonds, and that low unemployment may not lead to broad inflation due to technological advances. 

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