Archives of “June 2019” month

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Stick July 10 in your diary – Fed’s Powell testimony

  
  Analysis

On July 10 Federal Reserve Chair Powell will give his semi-annual testimony to Congress

  • Appears before the House (Powell will follow up the next day, July 11, with testimony to the Senate)
This testimony, where Powell delivers prepared text and then is asked question by the elected representatives ,often gives us more insight into the Chair’s (and the FOMC’s) thinking, depending on the quality of the questions of course.
On July 10 Federal Reserve Chair Powell will give his semi-annual testimony to Congress

Trump-Xi diner will be a watershed for markets

  
  Analysis

What are the outcomes from the meeting

Evercore ISI believes there are three outcomes for this week’s meeting between Trump and Xi.
The main one is that that Trump announces he will hold off on China tariffs indefinitely and restart trade talks. They see that as a 45% probability.
This would generally be good for markets but the uncertainty about how long talks could go would undermine enthusiasm and lead to more volatility.
A better scenario would be something similar but with a firm timeline, like 90 days. They see this as a 35% probability. This would give markets a chance to “breathe” they say and benefit trade-sensitive sectors.
The final outcome would be no specific mentions of delays on tariffs. They see this as a 20% likelihood and it would stoke fears. It would result in a statement saying something like the two sides would ‘maintain communications’ but would imply more tariffs to come.

What are the outcomes from the meeting

US stocks end mixed with the Dow up, broader indices lower.

  
Analysis, US Market

Major indices closed near lows for the day

The US major indices or ending the session with mixed results:
  • S&P index -5.04 points or -0.17% at 2945.41. The high reached 2954.92. The low extended to 2944.05
  • NASDAQ index -26.01 points or -0.32% at 8005.69. The high reached 8047.55. The well extended to 8004.62
  • The Dow ended higher by 8.68 points or 0.03% at 26727.81. The high reached 26806.52. The low extended 226723.37

Some gainers today included:

  • Broadcom, +1.9%
  • twitter, +1.64%
  • Deere & company, +1.60%
  • Merck and Company, +1.11%
  • United Technologies,+1.08%
  • Procter & Gamble, +1.02%
  • Stryker, +0.90%
  • Verizon, +0.87%
  • Goldman Sachs, +0.84%
  • Tesla, 0.80%
  • Coca-Cola, +0.74%
  • Facebook, +0.73%
  • J&J, +0.67%
Some losers on the day included:
  • Beyond Meat, -8.53%
  • Bristol-Myers Squibb, -7.4%
  • Celgene, -5.5%
  • Slack, -3.91%
  • Charles Schwab, -3.64%
  • under Armour, -2.52%
  • Chewy, -2.32%
  • Home Depot, -1.93%
  • Phillip Morris, -1.73%
  • Alcoa, -1.73%
  • Box, -1.71%
  • Nike, -1.46%
  • Wells Fargo, -1.36%
  • Morgan Stanley, -1.17%
  • Walgreens, -0.95%
  • Exxon Mobil, -0.95%

European shares and mostly lower

  
Analysis, Global Indices

UK’s FTSE the exception today

  • German DAX, -0.53%
  • France’s CAC, -0.12%
  • UK’s FTSE, +0.12%
  • Spain’s Ibex, -0.38%
  • Italy’s FTSE MIB, -0.49%
  • Portugal’s PSI 20, -0.81%

In the benchmark 10 year note sector, yields are ending mostly lower (Italy trades with a small rise in yields). France’s 10 year dipped below the 0.0% level last week, but recovered. Today, the low yield reached 0.016% before rising modestly into the close (to 0.023%).

European 10 year yieldsIN the forex market as London/European traders look to exit, the AUD is still the strongest and getting stronger since the US open). The USD has been overtaken by the JPY and GBP as the weakest of the majors on the day. The GBPUSD reached the highs from June (and peaked a little above those levels) but failed. The price rotated back down.

Have a look at who bought 200,000 ounces of gold just before it surged

  
Analysis, Gold / Silver

Kitco reports on a purchase by Russia (the Russian central bank)

(Kitco citing Russian central bank press release)
  • buying another 200,000 ounces or 6 tonnes of gold in May
  • total Russia total gold holding now at 2,190 tonnes (as of June 1)
Russia is not, of course, the only buyer, China (and others) have been huge buyers as reported in March, April, May (and further back!). For example:
  • (March) Chinese gold reserves – March buying of 11.2 tons of gold
  • (April) China stashing away more gold – bullion reserves up for a 5th straight month
  • (May) China – gold purchases running higher.
Kitco reports on a purchase by Russia (the Russian central bank) 
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