News for the Week of May 15 – May 19, 2017
by David Abuaf, CFA
Investment Manager, RJFS
Government / Political / non-Economic
- Araba gulf states have offered to take steps to improve relations with Israel if Netanyahu makes what they would consider a peace overture to the Palestinians
- Merkel signaled openness to changes to fortify the EU as she met with new French President Macron
- Ex-FBI director Mueller was named as special counsel to oversee the federal probe into Russia’s alleged interference in the US presidential election
- The US announced new sanctions against Iran aimed at its missile program
- Former Senator Lieberman is said to be the leading contender to be Trump’s pick to run the FBI
- NATO is considering reviving a naval command to counter Moscow’s submarine activity in the Arctic
General Markets / Economic
- Russia and Saudi Arabia sent oil prices higher with a joint statement that cuts in output should be extended into March 2018
- Existing home sales climbed 1.4% in the first quarter to hit their fastest pace in a decade
- China’s economic activity slowed in many sectors in April after a strong start to the year, a possible early sign of softness
- OPEC is trying harder than ever to win over big investors, but the group is finding that falling oil prices are making that a tough sell
- Japan’s economy picked up speed in the first three months of 2017, extending a recent stretch of growth
- Ford aims to cut about 10% of its global workforce amid CEO Fields’ drive to boost profit and the auto maker’s sliding stock price
- Media firms are racing to be included in new “skinny” streaming bundles as consumers ditch pay-TV at a record pace
- Italy put Alitalia up for sale after months of fruitless talks with unions and the airline’s shareholders
- US farmers are seeking to boost milk production by pampering their dairy cattle. Some ways include: using waterbeds, playing country music, backscratchers (does anybody remember the children’s book by Doreen Cronin, “Click, Clack, Moo”?!)
- An Austin man is suing his date for $17.31 because she was texting during their viewing of Guardians of the Galaxy Vol. 2. The man says his date’s texting was a ‘direct violation’ of the policy at the theater and that his experience was ‘adversely’ affected by it. The best part? After letting his feeling be known to her, she then left the theater and drove away, leaving the man without a ride home. The cost includes the ticket of the movie and pizza. The petition read, “while damages sought are modest, the principle is important as defendant’s behavior is a threat to civilized society”
Commentary for the Week of May 15 – May 19, 2017
by David Abuaf, CFA
Investment Manager, RJFS
The stock market finally took off its blinders last week to the drama in the nation’s capital. The S&P 500 suffered its steepest decline since September 9th, 2016, as phrases like obstruction of justice and impeachment moved from the fringes of liberal fantasies into mainstream discourse; however, by week’s end, the focus returned to stronger-than-expected earnings and the market pared most of its losses.
For months, the market has shaken off legislative setbacks for President Trump’s agenda, including multiple revisions to its health-care plan, and turned out the turmoil in the White House. But reports are that Trump allegedly tried to get former FBI Director Comey to drop a probe into a former aide’s ties to Russia followed with the swift appointment of former FBI Director Mueller as special counsel to investigate.
According to Brian Nick of TIAA Investment, “when this turned from legislative frustration into a possible ongoing investigation that could suck up the oxygen to get anything done in DC, any residual optimism left for tax reform or other policies to stimulate economy growth fell perilously close to zero.”
Moving to the microeconomic news, the weight of corporate and economic events prevailed again last week. Stronger than expected homebuilder sentiment and rising oil prices lifted stocks at the beginning of the week, while strong earnings helped the market recoup midweek losses. As earnings season ends, the focus will turn to economics. Up next week are minutes from the Federal Open Market Committee, as well as a budget proposal from the Trump administration. Expect more volatility as investors tune in to congressional hearings and possible subpoenas, says Natixis Asset Management Chief Strategist David Lafferty.
All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services.
This information is not a complete description of the securities, markets, or developments discussed and has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Commodities’ investing is generally considered speculative because of the significant potential for investment loss. Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Inclusion of these indexes is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results.
To opt out of receiving future emails from us, please reply to this email with the word “Unsubscribe” in the subject line.