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The Weekly Bottom Line

by Sergio Mariaca on Jul 14, 2019 9:52:14 AM |Share:

Here is what happened in the Capital Markets this week.

The Weekly Bottom Line (please click link to open)

The Weekly Bottom Line, courtesy of TD Economics, includes a review of market performances, recent key economic indicators, a calendar of upcoming key economic releases, and other relevant data. The highlights from this week’s report include: 

  • In a busy week for Fed communication, Chair Powell gave his semiannual testimony to Congress where he confirmed that crosscurrents hitting the outlook would likely require some additional accommodation.
  • The Fed Chair also noted that he doesn’t see the labor market as particularly hot and, with wage growth subdued, has more room to run.
  • Powell also noted the risk that weak inflation could prove more persistent than anticipated. That risk diminished some-what with the June CPI report, which showed core inflation firming across both goods and services.

The Weekly Bottom Line

by Sergio Mariaca on Jul 5, 2019 2:04:00 PM |Share:

Here is what happened in the Capital Markets this week.

The Weekly Bottom Line (please click link to open)

The Weekly Bottom Line, courtesy of TD Economics, includes a review of market performances, recent key economic indicators, a calendar of upcoming key economic releases, and other relevant data. The highlights from this week’s report include: 

  • News of a trade truce between the U.S. and China buoyed equity markets at the start of the week. The ceasefire put ad­ditional tariffs on hold, and there were some modest concessions on both sides.
  • On the economic front, messages were decidedly mixed this week. The ISM manufacturing and non-manufacturing in­dexes moved lower in June, while the payroll report showed a reacceleration in hiring with 224k jobs created last month.
  • Given the balance of risks, there is still a solid case for a 25- basis point “insurance” cut when the Fed meets later this month. But, insurance is likely to mean one or two rate cuts this year and not four or five as markets are pricing.

The Weekly Bottom Line

by Sergio Mariaca on Jun 28, 2019 1:15:00 PM |Share:

Here is what happened in the Capital Markets this week.

The Weekly Bottom Line (please click link to open)

The Weekly Bottom Line, courtesy of TD Economics, includes a review of market performances, recent key economic indicators, a calendar of upcoming key economic releases, and other relevant data. The highlights from this week’s report include: 

  • A light week on economic data was filled with Fed speeches and a trickle of news flow on the upcoming meeting between Presidents Trump and Xi. We do not expect to see a major breakthrough this weekend, but rather an agreement to continue talking (forestalling at least for now the threat of additional tariffs).
  • Chair Powell reiterated comments in his press conference last week that crosscurrents to the economic outlook had arisen relatively swiftly over the past month, leading the Fed to shift toward an increased willingness to cut rates.
  • Economic data was mixed, with home sales and confidence falling, but consumer spending rising. With revisions, second quarter personal consumption is likely to top 3% annualized, enough to push economic growth to the 2% mark.

The Weekly Bottom Line

by Sergio Mariaca on Jun 21, 2019 12:42:00 PM |Share:

Here is what happened in the Capital Markets this week.

The Weekly Bottom Line (please click link to open)

The Weekly Bottom Line, courtesy of TD Economics, includes a review of market performances, recent key economic indicators, a calendar of upcoming key economic releases, and other relevant data. The highlights from this week’s report include: 

·        The biggest event this week was the Fed’s pivot away from patience. It is now poised to act in the event of a further deterioration in the outlook. This cheered markets, with stocks and bonds rallying.

·        The Fed’s dot plot also showed that the majority of FOMC members judge the funds rate to already be at its long-run neutral level, and expect to lower rates next year. This is a seismic shift from expecting hikes back in December.

·        Our new forecast released this week, calls for the Fed to cut rates twice this year, as insurance against the downside risks that have accumulated due to trade tensions, and a late-cycle economic slowdown.

The Weekly Bottom Line

by Sergio Mariaca on Jun 15, 2019 3:57:00 PM |Share:

Here is what happened in the Capital Markets this week.

The Weekly Bottom Line (please click link to open)

The Weekly Bottom Line, courtesy of TD Economics, includes a review of market performances, recent key economic indicators, a calendar of upcoming key economic releases, and other relevant data. The highlights from this week’s report include: 

·        A potential trade war between U.S. and Mexico was averted, but global trade uncertainty remains.

·        Despite markets pricing in rate cuts, domestic indicators suggest that the U.S. economy is on decent footing. Inflation remains stubbornly low, however.

·        The Fed rate decision next week is clouded by conflicting signals, but we believe it will likely feature an easing bias.

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