Now that we are six months into 2019, we can confirm this year has presented a different picture of market volatility. While the lifting of the Huawei ban and “progress” in the trade war sparked new highs for stocks, weak manufacturing data rained on that parade. If we are going to see another leg up in this ascent, the financials sector needs to break out. With an update on the information technology sector, what will be the next disruptive tech? The official China Manufacturing PMI for June remains under contraction at 49.5 (under contraction < 50 PMI). Will the post-G20 Summit trade truce talks be able to revive Chinese (and global) manufacturing?
1. After an incredibly smooth ascent in 2017, 2018 and 2019 are certainly presenting a different picture of market volatility...
Source: Thechartstore.com, as of 7/1/19
2. If we are to enjoy another leg up with this bull, financials will need to play along. Yet to break out of this wedge to the upside, won't rates need to rise?
Source: Thechartstore.com, as of 7/1/19
3. The PC, software and cellphones. What will the next disruptive tech be to move us all forward?
Source: Thechartstore.com, as of 7/1/19
4. Small Cap U.S. stocks have painted a completely different picture.
Source: Thechartstore.com, as of 7/1/19
5. With the Dow Jones Industrials and Utilities near all time highs, the Transports have lagged and kept the Dow theory in a negative outlook.
Source: Thechartstore.com, as of 7/1/19
6. The FED's preferred measure of inflation, the PCE, is still a half point below the FED's target for inflation of 2%. The door for at least one rate cut is open...
Source: WSJ Daily Shot, as of 6/28/19
7. While a trade "truce" is welcome news, it does not hide the fact that the trade war has already caused quite a bit of damage. China's manufacturing remained in contraction in June...
Source: WSJ Daily Shot, as of 6/28/19
8. China hits another record, albeit destructive to this planet. See the highest carbon emissions by nation.
Over the weekend, President Trump and China's Xi Jinping agreed during the G20 summit to restart trade talks. They've pledged to hold on applying fresh tariffs to either country's imports and relax the Huawei ban, which would allow for U.S. companies to continue doing business with the Chinese tech giant.
Are you feeling hopeful for a new agreement between the world's two largest economies? Let us know, below.
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.
