Legend has it, on this day in 1792, 24 merchants and stockbrokers started the New York Stock Exchange under a Buttonwood tree at 68 Wall Street, marking its 217th year. The first security to be listed? Bank of New York Melon, which now sits at #136 in the S&P 500® Index in terms of market cap.
In other news: while the S&P 500 has mostly rebounded since Monday, the bond markets might be telling a different story. Ned Davis proves that stock buybacks provide a boost to the S&P 500, a 19% boost to be exact. Last year's tax cuts seemed to have a net benefit, including for households. However, the trade war has eroded all of that benefit, disproportionately so for low-income households. We continue to see intended (and unintended) consequences of tariffs as the U.S. and China struggle to come to agreeable terms. There is a small glimmer of hope though out of the New York and Philadelphia Fed despite declines in Industrial Production and Manufacturing Output.
1. What are the bond markets telling us? It is quite different from the equity markets!
Source: Nordea Markets and Macrobond, as of 5/16/19
2. Buybacks can be looked at as a type of dividend for investors or as a more sinister corporate $ grab. Regardless of your view, they have a definitive positive effect on stock prices...
Source: (top) S&P Down Jones Indices; (bottom) Ned Davis Research, S&P Global Market Intelligence, as of 5/17/19
3. Putting politics aside, this is crucial information!
Source: @GregDaco, Oxford Economics, Tax Policy Center, as of 5/17/19
4. A cheaper Yuan means our trade deficit should grow...
Source: WSJ Daily Shot, as of 5/17/19
5. Trade wars don't just hurt the "combatants"...there is unintended collateral damage...
Source: Credit Suisse, WIOD, as of 5/16/19
6. The trade war is not helping China's manufacturing.
Source: WSJ Daily Shot, as of 5/16/19
7. Perhaps it is a little early to sound the "all clear"...
Source: WSJ Daily Shot, as of 5/14/19
8. Yet some great news out of the NY FED.
Source: WSJ Daily Shot, as of 5/15/19
9. Another solid report from the Philly FED.
Source: WSJ Daily Shot, as of 5/16/19
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Disclosure: The charts and info-graphics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are a recommendation to take any action. Individual securities mentioned may be held in client accounts.
