Monday – July 15, 2019

Market opens flattish to begin the new week. Earnings come into focus. Expectations are for a contraction in Q2 numbers, but the big question is, what matters most: earnings or the Fed? The narrative has changed quite a bit this Summer. Bad news is good news because the Fed put is in place. The economic slowdown continues to gain momentum, as evidenced with more weak data out of China. But central banks around the globe are expected to keep injecting liquidity in the system which has been sending stocks higher. Citigroup reported a solid number, putting a bid under the Banks in early trading, which seems to have reversed lower since. There was more M&A over the weekend too. In US-China trade news, Mnuchin and Lighthizer are expected to travel to Beijing soon for trade talks. Differences remain over structural reform, status of existing tariffs, China agriculture purchases, and lack of clarity on Huawei reprieve. However, rhetoric from officials relatively more upbeat. China reported its weakest economic data in 3 decades. But that was expected and Chinese stocks were higher overnight. Great Britain is trying to figure out what they look like Post-Brexit, recognizing the need to strengthen the US alliance, which has been strained. Congress is looking at the role of Tech and financial services. There’s a lot going on. It’s not a sleepy summer. The Dollar is stronger, Oil is weaker and interest rates are ticking higher with money moving back into Bonds. It’s going to be an eventful week.

Have a great morning,

Mike Frazier

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