November 13, 2017 – Weekly Market Commentary



 

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Nyshka Chandran – CNBC
TPP Trade Deal Advances Without United States

Summary: Countries in the Trans Pacific Partnership (TPP) trade deal agreed to move ahead on core elements of the deal without the US. Analysts say the completed deal may mean American farmers and small businesses could be hit by higher tariffs when shipping to Asia-Pacific countries. 

 

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Alex Pappas, Joseph Weber, Chad Pergram – Fox News
Senate Republicans Unveil New Tax Plan That Delays Corporate Cut

Summary: The Senate’s revised version of the House’s tax reform bill would delay corporate tax cuts for a year to lower the cost of the proposed bill. Corporate tax cuts would not come into effect until 2019. Other key changes include a full repeal of the state and local tax deduction and keeping the existing number of tax brackets but lowering the second lowest bracket from 15% to 12% and the highest from 39.6% to 38.5%.

 

Euro Bills

Deutsche Welle
Eurozone Growth at Fastest Pace in 10 Years

Summary: The European Commission raised its 2017 growth forecast to 2.2%, which would be the fastest pace in a decade. The Commission said that global economic improvements along with higher rates of employment and wage growth in the eurozone will support growth in the 19 country bloc. 

 

Oil rig

Julia Simon – Reuters
Oil Prices Rise on Supply Cuts and Political Tensions in Saudia Arabia

Summary: Crude oil prices settled near two-year highs last week. Prices rose because of recent political consolidation efforts by King Salman in Saudi Arabia and OPEC output cuts. Additionally, global inventories experienced larger than expected draws in October. 

 

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Stephen Gandel – Bloomberg Gadfly
Bond Investors Are Stock Investors’ Latest Concern

Summary: A flattening yield curve has historically been a recessionary signal. Recently, the yield curve has flattened more than expected. While the bond market is signalling an economic slowdown, the equity markets are hitting new highs. The disconnect is concerning, but many analysts are pointing towards central banks as the culprits. Excessive bond purchases may be distorting the yield curve in a way that affects the bond markets without having a negative effect on equity markets. 

 

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Kate Moore – BlackRock
Can the EM Equity Revival Last?

Summary: After 5 years of declining profitability and weak earnings growth, emerging market stock fundamentals are improving. Moore says that we are in the early innings of an emerging market turnaround driven by structural reforms and stimulative monetary policies. Additionally, EM equities are still attractively priced relative to developed markets. 

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