Weekly Market Commentary

Jeremy Diamond and Julia Horowitz – CNN Money
Trump Hits Allies With Metal Tariffs

Summary: President Trump imposed metals tariffs on Canada, Mexico, and the European Union after letting exemptions for the ally countries expire. All of the trading partners have vowed to retaliate with their own tariffs against the US. The move will complicate ongoing negotiations on NAFTA and further entrenches the US in an ongoing trade spat with its largest trading partners. 

Italian Flag - Waterloo Weekly Market Commentary

Livia Borghese and Judith Vonberg – CNN
Reshuffled Cabinet Approved, Italian Prime Minister Sworn In

Summary: Giuseppe Conte was officially sworn in as Italian Prime Minister. Conte was initially vetoed by the Italian President because of his selections for cabinet positions, but the president’s replacement relinquished the position to Conte after a new cabinet was formed. The result establishes a euroskeptic government that runs the risk of pushing to abandon the euro or leaving the European Union. 

Oil Pump  - Waterloo Capital Weekly Market Commentary

Rania El Gamal – Reuters
Major Oil Producers Vow to Limit Production Through 2018

Summary: OPEC states and non-OPEC allies said that they plan to keep production limits in place through the end of 2018 but will act to offset supply shortages. The member states believe that the markets are being driven by a “fear of a shortage”, but that actual supply has still not been overtaken by demand. Countries involved in the decision said that any increase in output would be dictated by market conditions and that the move would be a “collective action”.

Shopping Mall - Waterloo Weekly Market Commentary

Jeffry Bartash – MarketWatch
Consumer Spending Surges, Inflation Remains Mild

Summary: Consumer spending rose for the second straight month signalling that one of the largest drivers of the economy is maintaining positive momentum. Core inflation rose to a 1.8% year over year rate. The report indicates that the Fed will be able to maintain its plan of gradual rate hikes this year. 

Tablet with price chart - Waterloo Weekly Market Commentary

Russ Koesterich, CFA – BlackRock
Money is Still Cheap Enough to Support Stocks

Summary: US interest rates are back to their 2014 peak and the two-year Treasury yield is the highest it has been in roughly a decade, but financial conditions have not yet tightened enough to become a headwind to stocks. In fact, three factors have caused overall financial conditions to become easier in recent weeks. The dollar is still down year over year, high yield spreads are still 1.8% below their 20 year average, and equity volatility has fallen as the market moves sideways. 

Jeffrey Kleintop – Charles Schwab
Are Stocks Taking a GAP Year?

Summary: Global stock markets have struggled to overcome concerns regarding global growth, trade agreements, and monetary policy changes. Kleintop believes that the concerns holding investors back during the first quarter will start to fade through the rest of the year. Global growth should rebound in Q2, which means that fallout related to trade negotiations will likely be overcome by rising world trade growth, and fears related to monetary tightening can be overcome by a boost from fiscal reforms. 





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