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We like to provide a deep dive into earnings trends at least once a year and given that we are finishing up what – based on year-over-year earnings growth – is the worst earnings season in three years, we felt the time was appropriate.
We are seeing a strong negative return skew for the first time since October 2018. Investors should come to expect the negative skew and prepare accordingly. Head of Quantitative Strategies Michael Hunstad explains.
Rising trade disputes and U.S.-China strategic tensions are increasingly weighing on global risk assets. How are the frictions playing out on the ground in China? A group of our senior investors recently went on a trip to the mainland to take the pulse on corporate sentiment and potential impacts on global manufacturing supply chains.
Domestic equity markets experienced widespread selling pressure throughout the month, as trade wars and tariffs dominated the news cycle. The S&P 500 Index notched its worst May in seven years and the second-worst return in May since the 1960s. Negative sentiment certainly existed at the beginning of May, but the market had mostly shrugged off bad news for all of 2019 behind a dovish Federal Reserve (Fed), which pushed domestic indices to record highs to close out April.
U.S. Treasury yields continued declining last week, despite improved sentiment. Rates vacillated until Friday’s weaker-than-expected payrolls report pushed rates lower. Market-based probabilities that the Federal Reserve (Fed) will cut rates in 2019 are near certainty.
A collective sigh of relief was expelled on Friday evening as US President Donald Trump announced he would indefinitely suspend the planned imposition of tariffs on Mexico — which was set to go into effect on June 10. Markets have entered “risk on” mode, given that the crisis was averted.
Global stock markets jumped last week, with the S&P 500 Index rising 4.5% for its biggest gain since late November.1 Some of the advance came from short covering and a sense that markets had become oversold. But the boost came mainly due to hints of a more dovish turn in Federal Reserve policy.
Global equities advance on dovish central bank comments, while the race for the next U.K. prime minister will officially begin this week.