Get an inside look into some of the biggest stories influencing the market – From the Fed shifting its stance on rate cuts to new updates on the “trade war” and the IPQ craze rewarding lesser known companies. Get the details by reading on.
The Federal Reserve Holds Rates Steady – The Federal Reserve met on Wednesday, with many market participants expecting no change to rates but hoping that the Fed would shift its stance on the possibility of rate cuts in 2019. The Fed, it seems, delivered on that hope. Federal Reserve Chairman, Jerome Powell, said in a statement that “the case for somewhat more accommodative policy has strengthened,” which echoed a statement he made in January about a weakened case for tighter monetary policy. The outcome of that statement in January was all but assurance that rates would not move higher in 2019, and the outcome of Powell’s statement on Wednesday appears to be the expectation of a rate cut coming in 2019. The Fed cited recent economic data in the U.S. to justify not cutting rates just yet, as the job market remains tight and inflation readings are modest but not overly low. Fed officials appear more worried about global economic conditions versus conditions here in the U.S., underscored by the statement that “it’s really trade developments and concerns about global growth that are on our minds.” The market moved higher on the news, supported by the Fed’s renewed commitment to sustain the economic expansion by whatever means necessary. Meanwhile, in Europe, ECB President Mario Draghi gave indication this week that the central bank could cut interest rates in the near future, and perhaps even expand its bond buying program. The U.S. dollar strengthened on the news.1
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How Could the Trade War Impact Global GDP?
One news story that merits continuous coverage is the ongoing “trade war.” Our team has been studying the various ways the trade dispute with China could impact global GDP growth. And in our just-released report, you will get our view on the following:
If you have $500,000 or more to invest and want to learn more, click on the link below to get your free report today!
Download Our Just-Released Market Strategy Report Today!2
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The IPO Craze Has Rewarded Some, But Not Others – The initial public offering (IPO) craze continues apace, but the beneficiaries of market enthusiasm have not been the most high-profile companies to go public, like Uber and Lyft. Instead, the market has been rewarding lesser known companies, which have perhaps benefited from more modest (but still elevated) valuations upon listing. Companies such as CrowdStrike Holdings; Chewy, an online pet supplier; and Fiverr International, an online marketplace for freelance contractors, have seen solid jumps in early days of trading. It goes to show that the IPO market is largely unpredictable, with winners and losers often running counter what one might expect. On the whole, tech IPOs are up approximately 30% through last Friday, which is higher than the return on the Nasdaq over the same period (18%).3
The Latest on Trade – The trade saga continues, with this week kicking off a week of hearings in the U.S. trade representative’s office. On the agenda: consumer and corporate grievances related to the planned 25% of additional tariffs on $300 billion of Chinese imports. To date, the consumer has largely been shielded from direct impact of tariffs, as many consumer goods have not yet been taxed. The Wall St. Journal analyzed some of the goods that would get caught up in this latest round of tariffs – 273 categories in total – and found that there were few comparable alternatives produced domestically or elsewhere for many of the goods. Items like fireworks, fishing poles, and electric blankets almost exclusively get imported from China, to the tune of $66.3 billion in 2018. Many companies have voiced concern over the latest round of tariffs, as they have not been able to find substitute suppliers to tide them over until a broad agreement is reached. President Trump and Chinese President Xi Jinping agreed to have an extended meeting in Japan next week at the G-20 Summit, but neither side has indicated that the purpose of the meeting is to reach an agreement. Until then, many companies and consumers my continue to feel effects of slightly higher prices.4
Want a deeper look into the trade dispute and its effects on the economy? Our team has been studying the various ways the trade dispute with China could impact global GDP growth. In our just-released report, you will get our view on the following:
If you have $500,000 or more to invest and want to learn more, click on the link below to get your free report5 today!
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