cancel2 2022
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Investors have been haunted by three big themes this week: trade talks, U.S. politics and, lately, the economy.
It has been a tall order trying to get the clouds to clear on any one of these issues. As for the first, stocks have been pinning gains on hopes of a trade deal. Talk of a broad agreement, and a “productive meeting” tweet from Treasury Sec. Steven Mnuchin may have calmed some nerves as trade wrapped Friday. you
“U.S. December retail sales rather shocked financial markets yesterday by seeming to imply that Americans had abandoned their lifelong national past time of spending money they don’t have on things they don’t need,” Paul Donovan, chief economist of UBS Global Wealth Management, told clients in a webcast.
“The world can probably breathe easily however, as this can be filed away under the headline of dodgy data,” he said, going on to point out how it was the second-best January for retail employment in 30 years, which hardly jibes with gloomy December sales data.
Our call of the day, from Seema Shah, global investment strategist at Principal Global Investors, is less sanguine. She says get inured to data-driven volatility for stocks, thanks to the U.S. central bank.
“The market is currently lacking in direction because there is no guidance from the Fed. So while the market tries to decide what the economic and monetary policy trajectory is, ‘the Fed’s data dependency means volatility will be elevated and markets may be subject to wild swings,’” said Shah in emailed comments.
Shah worries that the market has swung from “excessively pessimistic to excessively optimistic,” and may be underestimating coming headwinds from a global slowdown. While Fed Chairman Jerome Powell’s U-turn is one reason that she likes U.S. and emerging-market equities, she hasn’t got hopes that the current rally will last too much longer.
“If the underlying economy really is that weak, weakening earnings growth will weigh on equities. Or, if the Fed was simply propping up markets, renewed fears of inflation and rising interest rates are likely. Whichever reason you prefer for the Fed’s U-turn, the conclusion is the same: enjoy the ride while it lasts.“
https://www.marketwatch.com/story/g...hank-the-fed-for-that-says-analyst-2019-02-15
It has been a tall order trying to get the clouds to clear on any one of these issues. As for the first, stocks have been pinning gains on hopes of a trade deal. Talk of a broad agreement, and a “productive meeting” tweet from Treasury Sec. Steven Mnuchin may have calmed some nerves as trade wrapped Friday. you
“U.S. December retail sales rather shocked financial markets yesterday by seeming to imply that Americans had abandoned their lifelong national past time of spending money they don’t have on things they don’t need,” Paul Donovan, chief economist of UBS Global Wealth Management, told clients in a webcast.
“The world can probably breathe easily however, as this can be filed away under the headline of dodgy data,” he said, going on to point out how it was the second-best January for retail employment in 30 years, which hardly jibes with gloomy December sales data.
Our call of the day, from Seema Shah, global investment strategist at Principal Global Investors, is less sanguine. She says get inured to data-driven volatility for stocks, thanks to the U.S. central bank.
“The market is currently lacking in direction because there is no guidance from the Fed. So while the market tries to decide what the economic and monetary policy trajectory is, ‘the Fed’s data dependency means volatility will be elevated and markets may be subject to wild swings,’” said Shah in emailed comments.
Shah worries that the market has swung from “excessively pessimistic to excessively optimistic,” and may be underestimating coming headwinds from a global slowdown. While Fed Chairman Jerome Powell’s U-turn is one reason that she likes U.S. and emerging-market equities, she hasn’t got hopes that the current rally will last too much longer.
“If the underlying economy really is that weak, weakening earnings growth will weigh on equities. Or, if the Fed was simply propping up markets, renewed fears of inflation and rising interest rates are likely. Whichever reason you prefer for the Fed’s U-turn, the conclusion is the same: enjoy the ride while it lasts.“
https://www.marketwatch.com/story/g...hank-the-fed-for-that-says-analyst-2019-02-15
