Weekly Market Commentary

European Union Flag - Waterloo Weekly Market Commentary

BBC News
EU Tariffs on US Goods Come Into Force

Summary: The EU officially imposed more than $3 billion in tariffs on US products such as bourbon whiskey, motorcycles and orange juice. EU President Jean-Claude Juncker said the measures will rebalance and safeguard the EU. It is unclear how tariffs imposed by both countries will influence consumers, but the initial belief is that it will increase costs. 

USA Flag - Waterloo Weekly Market Commentary

Jethro Mullen and Kevin Liptak – CNN Money
Trump Targets Chinese Tech Investment in Latest Spat

Summary: The Trump administration is set to announce measures that will restrict Chinese investments in US technology companies. The rules are expected to bar firms with at least 25% Chinese ownership from buying companies involved in technology deemed “significant” by the White House. The rule will likely be imposed under the 1977 International Emergency Economic Powers Act which gives the president authority to take certain measures against another country on the basis of national security. 

Capitol Hill - Waterloo Weekly Market Commentary

Richard Wolf – USA Today
Supreme Court Allows States to Collect Online Sales Taxes

Summary: The Supreme Court ruled that states can collect sales taxes from online retailers. The decision will boost state revenues but may come at the expense of consumers and sellers who have avoided the tax since an original ruling in 1992. E-commerce companies sold off following the news. 

Oil Pump - Waterloo Weekly Market Commentary

Sam Meredith, Patti Domm, Tom DiChristopher – CNBC
OPEC Ministers Agree to Raise Oil Production

Summary: OPEC leaders announced a deal that will increase oil supplies by an estimated 600,000 to 800,000 barrels a day. Crude prices rose on the news because the overall production increase was less than expected. All members are expected to share the increased production capacity. 

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Liz Ann Sonders, Jeffrey Kleintop, Brad Sorensen – Charles Schwab
Searching for Balance

Summary: Consistent but slower than average growth may allow market and credit peaks to be put off for longer than expected. Trade disputes have been increasing volatility, but as of now, the effects will only be short term. A healthy US economy and strength in the consumer sector should offset trade worries. 

Kate Moore – Chief Equity Strategist
The Re-Opening of the Capital Spending Spigot

Summary: Companies are showing signs of strong earnings growth and have more free cash flow to put to work. Over the next 12 months, capex spending is expected to grow at its highest level since 2012. Capex lays the foundation for future growth, but companies that spend excessive amounts have actually lagged low capital spenders since the financial crisis. This could result in a short-term pullback or sideways move for some companies with the potential to boost earnings growth in the future. 





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