May 14, 2018 – Weekly Market Commentary


American Flag - Waterloo Capital Weekly Market Commentary

Kevin Liptak and Nicole Gaouette – CNN Politics
Trump Withdraws From Iran Nuclear DealSummary: President Trump announced that the US would be quitting the Iran nuclear deal and said that he would initiate new sanctions on the country. Some of the US’ closest allies expressed concerns about the decision. The news led to a rise in oil prices and boosted the materials and commodity sectors.

Oil Pump - Waterloo Capital Weekly Market Commentary

Ayenat Mersie – Reuters
Oil Prices Rise Above $70Summary: West Texas Intermediate crude (WTI) prices settled above $70 for the first time since November 2014. Oil prices have been rising due to a move by ConocoPhillips to take Caribbean assets of Venezuela’s state-run oil company to enforce a $2 billion arbitration and the expectation of renewed sanctions on Iran’s crude sales. 

US Dollar - Waterloo Capital Weekly Market Commentary

NASDAQ – MT Newswire
Stocks Rise on Tame Inflation ReportSummary: The tame report kept yields on the 10-year Treasury below 3% and lowered the chances that the Fed will have to become more aggressive when raising rates this year. Investors welcomed the report because it indicates that the economy remains strong, but is not on its way to overheating. 

Capitol Hill - Waterloo Capital Weekly Market Commentary

Jeremy Diamond and Kevin Liptak – CNN
US, North Korea Summit Will be Held in SingaporeSummary: The geopolitical concerns sparked by the US exiting the Iran nuclear deal were somewhat offset by the announcement of the date and location of a historic meeting between President Donald Trump and North Korean Leader Kim Jong Un. Their meeting will be held on June 12th in Singapore.

Charles Schwab Logo - Waterloo Capital Weekly Market Commentary

Liz Ann Sonders – Charles Schwab
Beast of Burden of a High Earnings BarSummary: More than 85% of S&P 500 companies have reported earnings and nearly 80% of companies have beat expectations. Sonders warns investors that the blowout quarter may indicate that we are nearing an earnings peak. A slight pullback in earnings doesn’t signal the end of the bull market, but investors should rein in their return expectations as multiples and earnings expectations contract. 

BlackRock Logo - Waterloo Capital Weekly Market Commentary

Russ Koesterich, CFA – BlackRock
3 Reasons to Stick With Emerging MarketsSummary: Koesterich argues against abandoning an allocation to emerging markets based on recent performance. There are three reasons to remain positive on EM prospects. First, the recent weakness in the asset class has restored its relative value against developed markets. Second, the global economy is still growing strongly. Third, a stronger dollar is a headwind but has historically only had a modest impact on returns. 

Price Chart - Waterloo Capital Weekly Market Commentary

Janet Levaux – ThinkAdvisor
Gundlach: Watch This Number Instead of The Yield CurveSummary: Bond guru and DoubleLine Capital CEO, Jeffrey Gundlach, said that right now the core consumer price index is more important than the flattening yield curve. If the index rises above 2.25% the Fed will likely be forced to change their slow-and-steady rate hike strategy and begin tightening at a more rapid pace. Higher yields would not lead to a recession this year, but would weigh on both stock and bond returns and could signal the peak of the business cycle. 





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