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Sergio Mariaca

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The Weekly Bottom Line

by Sergio Mariaca on Aug 2, 2019 3:15:00 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: 

·        Financial markets plunged after mixed messaging by the Federal Reserve, and later a 10% tariff on all remaining imported Chinese goods was announced to take effect in September.

·        The Federal Reserve cut its policy rate by 25 basis points this week, but markets were unhappy with the lack of commitment to cut more if necessary.

·        Slowing global economic growth and past tariff actions suggest that another cut is likely in September. However, escalating trade tensions may require even lower interest rates to help cushion the fallout.

The Weekly Bottom Line

by Sergio Mariaca on Jul 26, 2019 3:17:00 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: 

  • Markets had no summer vacation this week, with a new British PM, dovish message from the Euro-pean Central Bank,  and new U.S. GDP data to digest.
  • Advanced economy central banks are all sounding dovish, with the Bank of England likely to be more cautious next week now that the risks of a disorderly Brexit have risen.
  • Second quarter GDP data showed that U.S. domestic growth remained solid in Q2. But the Fed is likely more concerned with weakness in investment and exports as it prepares to cut rates next week.

The Weekly Bottom Line

by Sergio Mariaca on Jul 19, 2019 1:00:00 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: 

  • Chinese economic growth slowed 6.2% y/y in the second quarter of this year, as rising trade tensions weighed on activity. Signs of wear are also showing in the U.S., where industrial output continued to grow at a slow pace in June.
  • U.S. housing data remains soft. Starts eased in June, while permits dropped precipitously (-6.1% m/m), pointing to more weakness in the pipeline. That said, the services side of the economy continues to hold up well, with consumption providing a major helping hand. Retail sales rose by 0.4% in June, extending the winning streak to four straight months.
  • The resilience of the American consumer suggests less urgency for the Fed to cut rates later this month. But, Fed speak­ers pushed back against that notion this week, emphasizing the need to get ahead of any potential weakness.

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.

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