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U.S. Futures are Lower as Trade Tensions Weigh #Huawei #Jobless #Manufacturing

U.S. futures are lower as trade tensions weigh. Additional companies announced that they will suspend future business with Huawei in order to comply with the U.S. ban. The latest companies to comply with the ban include Arm Holdings, Panasonic, Vodafone and others. On the data front, weekly jobless claims rose by 1,000 to 211,000, below expectations of 215,000. Later this morning the market will get a look at new home sales from April. European shares are lower with auto stocks leading the declines. German manufacturing was weaker than expected in May, falling slightly from 44.4 to 44.3. Asian stocks closed lower with Chinese stocks leading the losses. India’s Nifty 50 closed near record highs over election optimism.

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16 Hits

U.S. Futures are Lower as President Trump Considers Additional Chinese Supply Ban #TradeWar #China #FOMC

U.S. futures are lower as President Trump considers adding additional Chinese companies to supply ban. As the trade war marches on, the President is considering adding five more companies to the list that U.S. companies will stop providing products to. In Fed news, later this afternoon the markets will get a look at the minutes from the May FOMC meeting. European shares are lower, giving back earlier gains as trade rhetoric continues. Asian shares closed mostly higher with Chinese stocks lagging the region.

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27 Hits

Global Stocks Rise as Technology Stocks Bounce #Futures #Huawei #HomeSales

Global stocks rise as technology stocks bounce. After news that the Commerce Department will ease restrictions on Huawei from purchasing U.S. goods for 90 days, technology stocks moved higher, reversing some of yesterday’s decline. On the data front, later this morning, markets will get a look at existing home sales from April. European shares are trading higher with technology stocks leading higher. Asian shares closed mixed with China’s Shanghai leading higher.

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19 Hits

U.S. Futures are Lower as Technology Stocks Weigh #Huawei #Brexit #Nifty

U.S. futures are lower as technology stocks weigh. Semiconductor stocks are dragging the technology sector lower after several U.S. companies said they would stop supplying products to Huawei as the U.S. ban kicks in. China has responded that they are in no rush to re-ignite trade talks. European shares are lower with technology stocks leading the declines. On the Brexit front, PM Theresa May plans to present a “new, bold offer” as a final attempt to reach an agreement. Asian markets closed mixed with India and Australia leading higher. In India, news that Prime Minister Narendra Modi was likely to win re-election sent stocks higher. Australian shares surged on news that Australia’s conservative coalition will gain the majority in parliament.

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20 Hits

U.S. Futures are Lower as Trade Talks Stall #TradeTalks #China #Brexit

U.S. futures are lower as trade talks stall. Overnight Chinese officials said that they have no interest in resuming trade talks with the U.S. while the U.S. continues to threaten additional tariffs. News of Chinese officials pulling back sent global stocks lower. Later this morning markets will get a look at a preliminary read on May consumer sentiment. European shares are lower on U.S./China trade news as well as Brexit talks between the U.K.’s Conservative party and Labour party ending without an agreement. Asian shares closed mixed as Chinese shares lagged on trade news.

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19 Hits

U.S. Futures are Higher as Markets Focus on Earnings #Earnings #Huawei #HousingStarts

U.S. futures are higher as markets focus on earnings. Strong earnings from Walmart and Cisco have helped boost markets this morning, despite President Trump taking further action in the trade war. President Trump declared a national emergency over the threat against American technology companies which was followed by news that it would become more difficult for Huawei to do business with U.S. companies. On the data front, housing starts and permits beat expectations in April. Weekly jobless claims fell 16k to 212k, also beating expectations. Lastly, the Philadelphia Fed Business Outlook survey also came in higher than expected in May at 16.6. European shares have turned higher after starting the session lower after President Trump began targeting Chinese tech companies. Asian shares closed mixed, with China closing slightly higher.

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26 Hits

U.S. Futures Extend Losses After Weaker Data #RetailSales #Manufacturing #Inventories

U.S. futures extend losses after weaker data. Stocks extended losses after April retail sales was reported as weaker than expected. April retail sales fell 0.2% for the month, while economists were expecting a rise of 0.2%. The already strong March retail sales number was revised 0.1% higher to 1.7%. The Empire Manufacturing Survey was reported as much stronger than expected at 17.8, against expectations of 9.0. Later this morning markets will get a look at industrial production from April, business inventories from March and the housing market index for May. European shares are lower as weak data out of China dragged materials and auto stocks lower. Asian markets were higher despite weak economic data out of China. Chinese industrial output and retail sales from April both missed expectations. With the weak Chinese data and trade dispute with the U.S., markets are hoping for additional government stimulus.

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32 Hits

U.S. Futures are Higher as Markets Digest Trade Headlines #Futures #TradeTalks #Tariffs

U.S. futures are higher as markets digest trade headlines. Markets had a rough start to the week after China announced retaliatory tariffs on $60B of U.S. imports. This morning, markets are trending higher as investors await next steps. On the data front, import and export prices both rose less than expected in April, while import prices fell 0.2% y/y. European shares are rebounding today with basic material stocks leading higher. Asian stocks closed lower with China’s Hang Seng leading the decline.

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28 Hits

U.S. Futures Take Another Leg Lower as Retaliatory Tariffs are Announced #Tariffs #China #DAX

U.S. futures take another leg lower as retaliatory tariffs are announced. China announced that they will raise tariffs on $60B of U.S. goods to 25% as of June 1st, with an emphasis on agriculture products. Stocks have been retreating over the past week as progress toward the two sides coming to an agreement has reversed. European shares have extended losses after the retaliation announcement, with the German DAX now down over 1.5%. Asian markets closed mostly lower as markets were already on edge over the trade dispute before the Chinese announcement.

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34 Hits

U.S. Futures are Lower as Additional Tariffs go Into Effect #TradeTalks #Tariffs #CPI

U.S. futures are lower as President Trump goes to Twitter and additional tariffs go into effect. In a series of tweets this morning, President Trump stated that talks with China continue in a “congenial manner”, but increased tariffs are in effect and will make our country stronger as we use the tariff money to help our farmers, infrastructure and healthcare. On the data front, April consumer prices were slightly cooler than expected, rising 0.3%m/m and 0.1% m/m less food and energy. European stocks are higher, with utility stocks leading, despite trade headlines. Asian stocks closed mostly higher despite the increased tariffs overnight on Chinese goods. Chinese stocks led higher with the Shanghai composite rising 3%.

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25 Hits

U.S. Futures are Lower After Data #PPI #Jobless #TradeDeficit

U.S. futures are lower after data. Producer prices moderated in April, rising 0.2%, down from the 0.6% rise in March. Less food and energy, prices rose 0.1% in April and 2.4% y/y. Weekly jobless claims were slightly above estimates, coming in at 228K against expectations of 215K. The trade deficit increased slightly to -$50B in March after posting better-than-expected results in January and February. European stocks are lower with auto stocks tied to China leading losses. Asian shares closed lower with Chinese markets closing sharply lower after President Trump turned up the rhetoric claiming that China “broke the deal” at a rally on Wednesday evening.

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31 Hits

U.S. Futures are Lower After Back-to-Back Loses as Trade Tensions Resurface #TradeTalks #Tariffs #China

U.S. futures are lower after back-to-back loses as trade tensions resurface. Reports that China has backtracked on key parts of a trade deal caused President Trump to get more aggressive, adding to market uncertainty. Vice Premiere Liu He will be in the U.S. this week and hopes are that the two countries can make progress before the new tariff deadline on Friday. On the data front, mortgage applications rose 2.7% last week as new purchase rose 4% and refinancing up 1%. European shares are mostly lower as trade news as weighed on markets. The materials sector, most closely linked with China, is lagging other sectors and is down by more than 1%. Asian shares closed lower as Chinese exports from April were weaker than expected, falling 2.7% y/y.

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34 Hits

U.S. Futures are Lower as Markets Weigh Trade Headlines #TradeTalks #China #JOLTS

U.S. futures are lower as markets weigh trade headlines. Despite news that Chinese Vice Premiere Liu He is still expected to make the trip to the U.S. this week, markets remain cautious as fresh tariff talk has put investors on edge. On the data front, later this morning the markets will get a look job openings from March when the Labor Department releases the latest JOLTS report at 10am. European stocks are trading lower as utility stocks outperform and financials lag after German factory orders rose less than expected in March. Asian shares closed mixed as Chinese stocks stabilized after Monday’s steep decline.

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60 Hits

Global Stocks Fall as Tariff Talks Resurfaces #Futures #Tariffs #China

Global stocks fall as tariff talks resurfaces. Over the weekend, President Trump announced that the U.S. could raise tariffs on $200B on Chinese imports to 25% this Friday. The news sent global stocks lower as markets were pricing in trade progress. European shares are sharply lower on the trade news with the exception of the U.K.’s FTSE which was closed on holiday. Euro zone PMI showed continued weakness in April as manufacturing remains under pressure. Asian shares closed lower with Chinese markets leading the losses. Chinese markets were down in the range of 3 to 6% for the day as trade talks may have hit a road block.

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41 Hits

Lee DeLorenzo Earns Top 50 Spot on Forbes’ Top Women Wealth Advisors

United Asset Strategies, Inc. is excited to announce that Lee DeLorenzo, founder and president, has been named to Forbes’ Top Women Wealth Advisors of 2019. Lee ranks in the top 50 women wealth advisors in the country and has earned the number one spot on Long Island on this year’s list.

Spotlighting 250 top advisors from across the country, the list is compiled by conducting in-person interviews and examining industry experience, assets under management, compliance records, and revenue produced.

 

For more information: https://www.forbes.com/profile/lee-delorenzo

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36 Hits

U.S. Futures Advance After Strong April Jobs Data #JobsReport #Payrolls #Unemployment

U.S. futures advance after strong April jobs data. Non-farm payrolls rose 263k in April, well ahead of the expected 180k rise. The unemployment fell to 3.6% and the participation rate fell to 62.8% as more people left the labor force. Average hourly earnings was in line with estimates, rising 3.2% y/y. On the trade front, the March trade deficit was reported as better than expected at $71.4B. Later this morning markets will get a look at the ISM non-manufacturing index from April. European shares are trading higher with most sectors in positive territory. Inflation data out of the euro zone came in slightly higher than expected in April. Asian markets closed mixed, while Chinese and Japanese markets remained closed on holiday.

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33 Hits

U.S. Futures are Mixed as Markets Digest the Latest Fed Commentary #FOMC #BOE #Inflation

U.S. futures are mixed as markets digest the latest Fed commentary. As expected, the Fed left rates unchanged after the latest FOMC meeting. Chairman Powell said the committee feels that the current policy is appropriate and stressed that lower inflation is likely transitory. On the data front, jobless claims were 230k last week, slightly higher than the estimate for 215k. First-quarter non-farm productivity was stronger than expected, rising 3.6%, while wage inflation remained tame, falling 0.9%.  Later this morning markets will get a look at factory orders from March. European shares are mostly lower after euro zone factory orders contracted again in April. The BOE left rates unchanged as expected. Asian shares closed mixed, however, China and Japan remained closed on holiday.

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96 Hits

U.S. Futures are Higher as Strong Earnings Boost Stocks #Earnings #Payrolls #PMI

U.S. futures are higher as strong earnings boost stocks. Stocks are rising, with help from strong earnings reports from Apple, Mondelez, AMD, CVS and more. On the data front, mortgage applications fell 4% last week as both purchases and refinancing were down over 4%. ADP reported that private payrolls rose 275k in April, far surpassing estimates for a rise of 180k. Later this morning markets will get a look at PMI and ISM manufacturing data from April as well as construction spending from March. Lastly, the Fed will announce their latest policy decision at 2pm today, with market expecting no change to the current policy. Most of European and Asian markets are closed today in celebration of May Day. London’s FTSE is trading lower on the day, while Australia’s ASX 200 closed higher.

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45 Hits

U.S. Futures are Mixed Ahead of Data #Futures #HomePrices #PMI

U.S. futures are mixed ahead of data. The employment cost index from Q1 was reported in line with expectations, rising 0.7% during the quarter and 2.8% y/y. Later this morning, markets will get a look at home prices from February, April Chicago PMI, April consumer confidence and March pending home sales. European shares are lower, with materials stocks leading losses, despite stronger than expected euro zone growth data from Q1. Asian shares closed mixed as Chinese PMI from April missed expectations.

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159 Hits

U.S. Futures are Mixed After Data #Earnings #Inflation #PCE #FOMC

U.S. futures are mixed after data. Personal income rose less than expected in March, rising 0.1%, while consumer spending beat expectations. On the inflation front, core PCE was unchanged in March and rose 1.6% y/y. This tame inflation report comes just one day before the FOMC begins their two-day Fed meeting that will conclude with a rate decision on Wednesday. On the earnings front, approximately 25% of S&P 500 companies will report earnings this week. European shares are mixed with weakness in energy shares. Asian shares closed mixed as the U.S. and China are set to meet again this week to continue trade negotiations. Japan’s market is closed for two weeks to celebrate the inauguration of Crown Prince Naruhito.

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42 Hits

US Futures are Slightly Higher After GDP Came in Better than Expected #Futures #GDP #Earnings

US futures are slightly higher after GDP came in better than expected. According to the Commerce Department, Q1 GDP came in at 3.2% compared to estimates of 2.5% as strong export numbers helped lift the overall number. Major earnings that also impacted overall sentiment included a miss on forecast from Intel, a bottom line miss from Exxon and a strong bottom line beat out of Amazon. Markets in Asia closed mostly lower as the Shanghai index continues to lead the drop. European markets are trading mixed with the DAX higher while the FTSE is trading flat to slightly lower.

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51 Hits

US Futures are Mixed This Morning with Dow Futures Lower While S&P and Nasdaq Futures are Higher #Futures #Earnings #Jobless

US futures are mixed this morning with Dow futures lower while S&P and Nasdaq futures are higher. Following an earnings miss, shares of 3M are down close to 10% in the premarket after the company reported earnings below estimates while also cutting its full year guidance along with job cuts worldwide. Nasdaq futures are being lifted by Facebook after the company reported strong earnings and shares are up over 8% in the premarket. In economic data, weekly jobless claims rose 37,000 to a seasonally adjusted 230,000 compared to estimates of 200,000. Markets in Asia closed mostly lower with the Shanghai markets leading the way down as investors are concerned the Chinese government may pare back its stimulus measures. European markets are trading mostly lower led by the FTSE.   

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294 Hits

Stocks Set to Open Flat After the S&P and Nasdaq Set a Record Closing High #Futures #Earnings #SPX

Stocks set to open flat after the S&P and Nasdaq set a record closing high. Futures are flat as markets digest yesterday’s gains as well as corporate earning reports from Caterpillar, AT&T, Kraft Heinz, Texas Instruments and more. On the data front, mortgage applications fell 7.3% last week with purchases falling 4% and refinancing falling 11%. European shares are mixed with auto stocks lagging after Nissan cut their profit forecast. Asian shares closed mixed with Australian stocks leading the region.

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62 Hits

U.S. Futures are Rising as Strong Earnings Boost Stocks #Earnings #HomeSales #Oil

U.S. futures are rising as strong earnings boost stocks. Better-than-expected results from Coke, United Technologies, Lockheed Martin, Procter & Gamble and others has helped lift stocks throughout the morning. Later this morning markets will get a look at new home sales from March, which are expected to fall from February. European stocks are mixed after being closed on Monday. Energy stocks are leading European shares higher as oil prices rise. Asian shares closed mixed with Chinese shares lagging after reports that China may focus on structural reforms in lieu of new stimulus measures.

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53 Hits

U.S. Futures are Lower as Earnings Kick Into High Gear #Futures #Earnings #Oil

U.S. futures are lower as earnings kick into high gear. About one-third of S&P 500 companies will report earnings this week, making it the biggest week for earnings reports for Q1. On the political front, President Trump announced that the U.S. will not renew Iranian oil waivers, which would force countries like China to find an alternative supply if they were to comply. Oil prices are higher by more than 2% as political tension drives prices higher. On the data front, later this morning markets will get a look at existing home sales from March. Analysts are expecting existing home sales to moderate after the nearly 12% surge in February. European markets are closed on holiday. Asian shares closed mixed with Chinese shares underperforming the region.

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269 Hits

U.S. and Many Foreign Markets are Closed Today in Observance of Good Friday #GoodFriday #HousingStarts

U.S. and many foreign markets are closed today in observance of Good Friday. Despite markets being closed today, there was some economic data released this morning. March housing starts and permits both fell for the month, while markets were looking for an advance higher. Both single-family and multi-family starts dropped for the month and February’s starts were revised even lower than the originally reported weakness. European markets are closed today, while Japanese shares led gains of the few Asian markets that were open.

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55 Hits

U.S. Futures are Higher After Data #RetailSales #Jobless #PMI

U.S. futures are higher after data. Stock futures gained traction after March retail sales were reported much stronger than expected. Retails sales rose 1.6% for the month with the control group rising 1%, both double expectations. Weekly jobless claims were also better than expected, falling 5k last week to 192k. Lastly, the April Philadelphia Fed business outlook survey was reported slightly below estimates at 8.5. Later this morning Attorney General William Barr will hold a press conference before releasing a redacted version of the Mueller report. The release of the report will give lawmakers a more detailed look than originally provided by Barr last month. European shares are mixed after disappointing PMI data from France and Germany. The recent PMI data has investors worried that the euro area may be slowing further. Asian shares closed mostly lower with Japanese shares lagging the region.

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61 Hits

U.S. Futures are Higher on Earnings and Trade Data #Earnings #TradeDeficit #BeigeBook

U.S. futures are higher on earnings and trade data. Stronger earnings from Morgan Stanley, Pepsico and Netflix have helped boost stocks. On the data front, the Commerce Department reported that the trade deficit fell again in February after the sharp decline in January. The deficit fell to 49.4B, well below estimates of 53.6B, as the goods deficit with China fell substantially in February. Later today, the market will get a look at anecdotal evidence of the economy form the 12 Fed districts when the Beige Book is released. European shares are mixed with material stocks lagging. Asian shares closed mixed despite stronger than expected GDP numbers out of China.

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65 Hits

Strong Earnings Have U.S. Futures Rising #Futures #Earnings #DAX

Strong earnings have U.S. futures rising pre-market. Strong earnings from United Health, Black Rock and Johnson & Johnson has helped boost stocks this morning. Markets will have economic data to digest with March industrial production and the April housing market index due out later this morning. European shares are broadly higher, led by the German DAX, after data showed that investor sentiment rose more than expected in April. Asian shares closed higher with Chinese shares leading the region as average new home prices rose faster than expected in March.

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65 Hits

U.S. Futures are Hovering Near Unchanged as Markets Digest Earnings Reports #Futures #Earnings #Manufacturing

U.S. futures are hovering near unchanged as markets digest earnings reports. Mixed reports from Goldman Sachs and Citigroup has markets searching for direction as both companies reported stronger earnings on weaker revenue. In a CNBC interview, Chicago Fed President Charles Evans said he would be comfortable leaving rates unchanged into the fall of 2020 to allow for inflation to be sustainable. On the data front, the Empire State Manufacturing survey came in stronger than expected in April, rising to 10.1, well ahead of expectations of 6.8. European shares are mostly higher on corporate earnings reports. Asian shares closed mixed on Monday with Japanese shares outperforming the region.

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73 Hits

U.S. Futures Rise on Strong Earnings and Deal News #Futures #Earnings #Chevron

U.S. futures rise on strong earnings and deal news. The energy sector got a boost after Chevron agreed to acquire Anadarko Petroleum in a $33B deal, while financials are getting a lift after stronger-than-expected quarterly results out of JPMorgan, Wells Fargo and PNC. On the data front, import and export prices were both higher than expected in March, with import prices rising 0.6% and export prices rising 0.7%. European shares are trading higher as euro zone industrial output fell less than expected in February and global optimism rises. Asian shares closed mostly higher as the U.S. and China continue to work out sticking points toward a trade deal.

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74 Hits

U.S. Futures are Slightly Higher After Data #Jobless #PPI #Inflation

U.S. futures are slightly higher after data. Strength in the job market continues as weekly jobless claims fell to a near 50-year low at 196k last week. On the inflation front, producer prices rose more than expected in March, rising 0.6% m/m and 2.2% y/y. Ex-food and energy, producer prices rose 0.3% m/m and 2.4% y/y. European shares are mostly higher one day after the ECB left rates unchanged. On the Brexit front, the EU granted British PM Theresa May an extension on the proposed exit until October 31st. This extension will give the PM over six months to get an agreement as to what Brexit should look like. Asian markets closed mixed on Thursday. Data out of China showed that consumer prices rose more than expected in March as food price inflation was higher than expected.

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70 Hits

U.S. Futures are Slightly Higher After Inflation Data #CPI #FOMC #ECB

U.S. futures are slightly higher after inflation data. Consumer prices rose slightly more than expected in March, rising 0.4% m/m and 1.9% y/y. Ex-food and energy, prices rose slightly less than expected, rising 0.1% m/m and 2.0% y/y. Later today markets will get a look at FOMC meeting minutes from the March meeting. Fed Chairman Jerome Powell will be speaking about the economy later today at the House of Representatives Democratic Caucus annual retreat in Virginia. European shares are trading higher after the ECB left rates unchanged. ECB President Mario Draghi reiterated that rates will likely remain unchanged at least through the end of 2019 and they would continue to reinvest maturing debt for an extended period after rate hikes begin. Asian shares closed mixed after the IMF reduced their outlook for global economic growth in 2019 from 3.5% to 3.3%.

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72 Hits

U.S. Futures are Lower as Trade Tensions Rise #Tariffs #EU #Earnings #JOLTS

U.S. futures are lower as trade tensions rise. President Trump is proposing new tariffs on imports from the EU as a retaliation for the economic damage to the U.S. created by Airbus subsidies. The U.S. is considering placing tariffs on up to $11B of EU goods. On the earnings front, Q1 earnings will kick into gear on Friday as JPMorgan and Wells Fargo will be the first large banks to report. Ahead of bank earnings, Bank of America has announced that they will raise their minimum wage to $20/hour over the next two years. Later this morning, markets will get a look at job openings in February when the latest JOLTS report comes out at 10am. European shares are moving lower after starting the session higher as investors weigh the impact of potential tariffs. Asian shares closed mostly higher, but lack of conviction kept gains small across the region.

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71 Hits

U.S. Futures Rise on Strong Jobs Data #JobsReport #Inflation #Unemployment

U.S. Futures rise on strong jobs data. The latest employment report showed that the economy added 196k jobs in March, with February’s weak jobs number getting revised higher by 13k. On the inflation front, average hourly earnings rose slightly less than expected. The unemployment rate remained unchanged in March at 3.8%. The employment numbers are being cheered by markets as it should keep the Fed on hold for now. European shares are rising after U.S. data with basic material stocks leading. British PM Theresa May has asked the EU for a Brexit deadline extension until June 30th so they can try to come to an exit agreement with opposition leaders. Asian shares closed mostly higher, however, Chinese markets were closed on holiday. Data out of Japan showed that household spending rose less than expected in February, rising 1.7%

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565 Hits

U.S. Futures are Flat as Markets Await Trade Developments #TradeTalks #Jobless #Brexit

U.S. futures are flat as markets await trade developments. President Donald Trump is scheduled to meet with Chinese Vice Premier Liu He at the White House later today to discuss trade progress. Progress on core issues could allow the scheduling of a meeting between President Trump and Chinese President Xi Jinping for a signing ceremony. On the data front, strength in the labor market continues as the Labor Department reported that jobless claims fell 10k last week to 202k. European stocks are mostly lower, with basic material stocks giving back most of yesterday’s gains. On Brexit news, a majority vote passed yesterday to block a no-deal Brexit, forcing Prime Minister Theresa May to seek an extension if no deal is agreed upon by the April 12 deadline. Asian shares closed mixed with Chinese shares outperforming the region.

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94 Hits

U.S. Futures Rise as Trade Progress Continues #TradeTalks #ADP #Brexit

U.S. futures rise as trade progress continues. The U.S. and China have reportedly resolved many of the sticking points and are moving closer to a trade deal. Chinese Vice Premier Liu He is in the U.S. meeting with trade representatives and will resume talks again later today. On the data front, private payrolls were lower than expected in March, rising by 129k. The weaker than expected number was partially offset by a 14k revision higher for February’s private payroll gains. Later this morning markets will get a look at the services sector with the release of the ISM non-manufacturing index from March. European shares are higher with material stocks leading on positive U.S./China trade developments. On the Brexit front, it is likely that U.K. PM Theresa May will request an extension to get a majority on an exit plan as the April 12th deadline approaches. Asian shares closed higher with Chinese shares leading the region.

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593 Hits

US Treasury Floaters – A Contrarian Opportunity for Cash

April 2nd, 2019

Fed induced selloffs are exciting times for bond pickers, as credit spreads tend to widen out while treasury rates move higher. This was the case in October 2018. Interest rates increased while spreads on many bond types began moving to their widest levels since 2016. The opportunity was short lived though, as the fed changed its message and fostered sharp bond appreciation from the 2018 lows. As a result, many investors are currently struggling to locate value in today’s market. While yields on most bonds are indeed lower, we feel a unique bond type is presenting relative value; US Treasury Floating Rate Notes.

These securities have cheapened in 2019 while the market moved to price in future interest rate cuts. Currently, market implied odds of one or more rate cuts by January of next year sit at 63.4% (CME Group FedWatch Tool). On the surface, it doesn’t seem sensible to own floating rate bonds if rate hikes aren’t on the horizon. We take a different view and believe these bonds are an interesting opportunity for the following reasons.
 

  • Yield – The 1/31/21 US Treasury Floater outyields all treasuries out to 11 years. With a current coupon of 2.528% (it pays the 3 Month T Bill rate + 0.115%) and a price of 99.95, these notes offer YTM of 2.555% given the current T-Bill rate. While the coupon can indeed change, the notes currently provide a 25 basis point yield advantage over two-year fixed rate treasuries and a 14.5 bp yield advantage over three-month bills.
     
  • Rate Outlook – While the fed appears likely to be on hold for a while, we see an unchanged fed funds rate as a possible outcome. In this scenario, we project the floating notes to outperform. Further, albeit less likely, we see future interest rate hikes as a possible scenario. In this case we feel the floaters will also outperform.
     
  • Historical Value – Since the treasury started selling floaters in 2014, buyers had to sacrifice yield. One example; when issued on 1/31/18, the US treasury two-year floaters offered 1.506% yield given the three-month bill rate at the time. This was 63.4 bps less than two-year fixed rate treasuries. Investors paid up for these due to the rate protection they offered. Today, these securities offer the same rate protection at a much better price point.

 

Matt DeLorenzo, Fixed Income Strategist

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215 Hits

U.S. Futures are Relatively Unchanged After Data #Futures #DurableGoods #AutoSales

U.S. futures are relatively unchanged after data. New orders for durable goods fell 1.6% in February, slightly better than the 1.8% decline expected by analysts. After stripping out transportation, orders rose 0.1% for the month. Later this morning markets will get a look at motor vehicle sales from March, with analysts expecting a slight rise from February. European shares are trading higher as financial stocks gain. Asian shares closed mostly higher, but off the highs of the day. Japanese shares lagged the region with shares falling slightly during the session.

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84 Hits

U.S. Futures are Holding Gains Despite a Weaker Retail Sales Report #Futures #RetailSales #PMI

U.S. futures are holding gains despite a weaker retail sales report. Optimism overseas improved sentiment this morning after China reported strong manufacturing data. On the U.S. data front, February retail sales fell 0.2%, while analysts were looking for a 0.3% gain. Retail sales ex-auto and gas fell 0.6%, with analysts expecting a 0.4% gain. Markets will get a look at additional data later this morning with the release of March PMI manufacturing index and the ISM manufacturing index, as well as business inventories from January and construction spending from February. European shares are higher, with material stocks leading, after strong data out of China gave that sector a boost. Asian markets closed broadly higher with Chinese stocks leading after PMI data out of China showed expansion in March.

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84 Hits

U.S. Futures are Higher as the Strong 1st Quarter Comes to a Close #PersonalIncome #Inflation #PCE

U.S. futures are higher as the strong 1st quarter comes to a close. The S&P 500 has risen over 12% this quarter, one of the strongest quarters since the current cycle began. Stocks have held gains this morning after mixed economic data. Personal income in February rose slightly less than anticipated, rising 0.2%. Consumer spending and inflation were both below expectations in January, as spending and the core PCE both rose 0.1%. Later this morning markets will get a look at business conditions in Chicago from March, February new home sales and a final read on consumer sentiment from March. European shares are higher with materials stocks leading the gains. U.K. Prime Minister Theresa May will put forward her last attempt to get a majority vote from Parliament for her Brexit deal that has already been rejected twice. China led Asian markets higher on renewed trade optimism following U.S./Chinese meetings in Beijing. Chinese officials have reportedly offered some concessions on previous sticking points.

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107 Hits

U.S. Futures are Mixed After Data #GDP #Jobless #Brexit

U.S. futures are mixed after data. U.S. stock futures are relatively unchanged after the final read of Q4 GDP and weekly jobless claims. The final read on Q4 GDP was reported at 2.2%, down from the last look of 2.6%, but in line with expectations. Weekly jobless claims fell by 5k to 211k, with analysts expecting a slight rise to 225k. Europeans shares are slightly higher with most sectors trading in positive territory. Brexit talks failed to make progress yesterday after none of the proposals put forward for vote achieved majority support. Asian shares closed mixed as the markets await developments from U.S./China trade talks. Japan’s Nikkei 225 lagged in the region, falling in excess of 1.5%.

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93 Hits

U.S. Futures Improve After Trade Data #Deficit #Oil #Brexit

U.S. futures improve after trade data. The January trade deficit fell sharply to $51.1B, after a sharp rise in December. Analysts were expecting the January deficit to be in the area of $57.3B. Later this morning the market will get a look at oil and gas inventories from last week. European shares are trying to turn positive despite Brexit uncertainty. Later today lawmakers will attempt to get an indication of what the next course of Brexit should look like as they vote on several proposals. Asian shares closed mixed with Chinese shares leading the region as the U.S. and China are set to resume talks on a trade deal tomorrow in Beijing.

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93 Hits

U.S. Futures are Higher as Global Stocks Gain #Futures #HousingStarts #ConsumerConfidence

U.S. futures are higher as global stocks gain. U.S. futures are holding on to gains after data as markets across the globe rise. February housing starts declined more than expected, falling at an 8.6% annualized rate. Housing permits were about in line with forecasts, falling 1.6%. Later this morning markets will get a look at house prices from January and consumer confidence from March. European shares are higher with energy stocks leading the gains. Asian markets closed higher with Japan’s Nikkei 225 leading the gains after lagging on Monday. Mainland Chinese shares lagged the region closing lower by more than 1%.

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701 Hits

U.S. Futures are Slightly Lower as Markets Weigh Global Growth and Mueller Report #Futures #YieldCurve #MuellerReport

U.S. futures are slightly lower as markets weigh global growth and Mueller report. Stocks fell on Friday as investors focused on the inverting yield curve and what that could mean for the economy. Over the weekend, Attorney General William Barr issued a statement that the Mueller investigation failed to prove that candidate Trump or his campaign colluded with Russia to influence the 2016 presidential election. With the conclusion of the investigation, markets are hoping the President can move forward with focusing on policy issues like a China trade deal or a new infrastructure plan. European shares are lower with most sectors trading lower. Asian shares closed sharply lower, with Japan’s Nikkei losing 3%, as markets fear a global economic slowdown.

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88 Hits

U.S. Futures are Lower After Yesterday’s Rally #Manufacturing #HomeSales #Brexit

U.S. futures are lower after yesterday’s rally. Markets rose around 1% yesterday after digesting the Fed’s latest commentary. Markets are pausing today after weak manufacturing numbers out of Germany have markets worried about global growth. On the data front, later this morning markets will get a look at existing home sales from February. European shares are lower as euro zone PMI below expectations in March along with Germany’s manufacturing sector contracting for three months straight. On the Brexit front, EU leaders have given PM Theresa May until April 12 to get lawmakers to agree to her deal or she seek a longer extension. Asian shares closed slightly higher, but no conviction in either direction as markets wait for trade developments.

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101 Hits

US Futures are Lower After Investors Weigh Chairman Powell’s Comments #InterestRates #FOMC #Dovish

US futures are lower this morning as investors are weighing the Fed’s monetary policy and Chairman Powell’s comments. The Fed announced they are forecasting no more rate hikes in 2019 and they will be putting an end to their tightening cycle by September. While this is dovish, these moves from the Fed drive worries about the overall economy. European markets are trading mostly lower with banks leading the way lower. Markets in Asia closed mostly higher as investors there welcomed the dovish moves from the Fed.

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103 Hits

U.S. Futures are Searching for Direction Ahead of the Fed Decision #FOMC #TradeTalks #Brexit

U.S. futures are searching for direction ahead of the Fed decision. U.S. futures are flat ahead of the 2pm FOMC announcement and press conference to follow. Trade is making headlines again this morning as concerns rise that China will walk-back certain concessions without certainty about the removal of U.S. tariffs. Later this morning, markets will get a look at oil and gas inventories from last week, but no economic data slated for release today. European shares are mostly lower, with most sectors trading lower. In Brexit news, tomorrow PM Theresa May will ask the EU to for a short delay of Brexit, in attempt to get an agreement done prior. Asian shares closed mostly lower, however, off the session lows. U.S./China trade headlines weighed on the region.

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104 Hits

U.S. Futures are Higher as the FOMC Two Day Policy Meeting Kicks Off #Futures #FOMC #FederalReserve

U.S. futures are higher as the FOMC two-day policy meeting kicks off. While the market is pricing in zero expectation of a rate hike tomorrow, markets will look to changes in the “dot plots” for signs of the Fed easing off the gas pedal. On the data front, later this morning markets will get a look at factory orders from January, with expectations of no change from December. European shares are higher with automobile stocks leading higher as Fiat Chrysler becomes the talk of a possible takeover. Asian shares closed mixed with a lack of conviction in either direction.

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100 Hits

U.S. Futures are Mixed to Start the Week Ahead of the FOMC Meeting #Futures #FOMC #HousingMarket

U.S. futures are mixed to start the week ahead of the FOMC meeting. The two-day Fed meeting will begin tomorrow with a policy decision expected on Wednesday. The markets are not expecting a change in policy in the current meeting, however, markets will be looking at the Fed’s commentary for signs of future policy decisions. On the data front, later this morning the market will get a look at the March housing market index, expecting a slight rise from 62 to 63. European stocks are mostly higher with bank stocks leading. Asian shares closed mostly higher with Chinese shares leading on reported trade progress with the U.S.

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