November 20, 2017 – Weekly Market Commentary



 

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Anna Edgerton – Bloomberg Politics
House Passes Tax Bill in First Step Toward Historic OverhaulSummary: House Republicans passes their version of tax reform legislation. The proposal cuts corporate taxes and would lower tax burdens for most individuals. The Senate is debating a separate plan which members will vote on after returning from their Thanksgiving break. 
 

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Fran Wang – Caixin 
China’s Economic Growth Slows as Property, Industrial Output CoolSummary: Recent data showed a broad-based slowdown in the Chinese economy. Industrial activity was hit by new anti-pollution policies, exports fell, and real estate investment contracted. Fixed asset investment, a key driver of consumer demand, posted its lowest growth rate since 1999.
 

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Stanley White, Leika Kihara – Reuters
Japan’s GDP Grows for Seven Straight Quarters, Outlook Remains SolidSummary: Japan’s economy expanded by 1.4% during the third quarter, beating analyst estimates. The increase was driven by consistent consumer activity and a pickup in capital expenditures. This is the country’s longest consecutive period of GDP growth since 1999-2001. 
 

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Sveinung Sleire – Bloomberg Markets
World’s Biggest Wealth Fund Wants Out of Oil and GasSummary: Prices of oil and gas equities fell last week following reports that the $1 trillion Norweigan sovereign wealth fund is considering divesting all oil and gas assets. The central bank said that the move would be a strategic way to manage the country’s financial risks. Norway relies on oil and gas business for about one-fifth of its GDP.  
 

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Brian Chappatta – Bloomberg
The U.S. Yield Curve Is Flattening and Here’s Why It MattersSummary: The U.S. yield curve was the flattest in 10-years as December rate hike expectations have pushed up the short-end of the curve and stagnant inflation has put pressure on the long-end. Flat and inverted yield curves have historically been leading indicators of recessions. Analysts are worried that the trend is a sign that domestic economic growth will contract in coming years. 
 

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Liz Ann Sonders – Charles Schwab
Green Grass and High Tides: Earnings Stellar But Not Without RiskSummary: Market earnings were stellar once again during Q3. Earnings growth has completely rebounded after contracting for four-quarters through Q2 of 2016. Profitability growth has been the most notable driver of the continued bull market run. Sonders expects Q4 to also be positive and is now looking for signs that earnings growth may peak in 2018.

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