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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.

The Weekly Bottom Line

by Sergio Mariaca on Jun 7, 2019 12:59:00 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: 

·         Trade tensions continued to dominate economic headlines, with U.S.-Mexico taking center stage. It remains unclear if a deal can be reached by Monday. The US-China spat also resurfaced, with signs that it is spreading beyond goods trade.

·         Fed Chair Powell noted that the Fed was monitoring trade developments closely, and was ready to “act as appropriate to sustain the expansion”. This appeared to soothe equity markets, which rebounded to a three-week high.

·         The May jobs report disappointed expectations, with payrolls up only 75k. Looking through the recent volatility, the hiring trend has slowed but remains decent, averaging 151k in the last three months. The unemployment rate held steady at 3.6% and wage growth, while slowing a touch, held above 3% y/y.

The Weekly Bottom Line

by Sergio Mariaca on May 31, 2019 1:40:00 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: 

·        U.S.-China trade tensions continued to dominate headlines as both countries dig in for another round of negotiations under more strained circumstances. U.S. tariffs against Mexico appear to also be in the works.

·        As trade tensions flare, investors have run for cover, driving up bond prices and sending the yield curve into inversion territory.

·        U.S. Q1 growth was revised marginally lower (3.1% vs. 3.2%), and Q2 is projected to be lower still (below 2%). Inflation however managed to edge marginally higher with core PCE at 1.6% year-on-year in April.

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