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Market Stock

Stock Market Bulls Cheer Quiet Session; Growth Stocks Bounce Back – Investor’s Business Daily

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Reference ID: #74664c70-c91c-11ea-8e7f-4b187dc09449

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Market Stock

Stock Market Rises As Trump’s Prospects Fall – Forbes

President Trump stands at podium

U.S. President Donald Trump speaks during a news conference. Photographer: Tasos … [+] Katopodis/UPI/Bloomberg


© 2020 Bloomberg Finance LP

If this trend persists, President Trump’s White House stay will be bookended by optimistic stock markets accompanying his arrival and his departure.

President Trump campaigned vigorously in 2015/2016, promising, among other things, to bring back former leading U.S. industries, then stagnant: Steel, aluminum, oil & gas and coal. However, he failed, and those groups are dramatically lower, even though the overall stock market rose.

Now, however, those stocks are joining today’s rising market because of Trump, but not for the reasons Trump anticipated. This time, it’s his potential leaving that is creating bullishness.

Following Congress’ 2017 year-end tax bill that included reduced corporate taxes, Trump began to act to support his favored industries. He unilaterally (that is, without advisory input or support from Congress) enacted “emergency” tariffs and signed Executive Orders (many reversing established measures and procedures). And he made his intentions clear by engaging in anti-world (particularly anti-China) trade rhetoric.

However, except for brief bouts of optimism, those pet industries have performed terribly as Trump’s hoped-for benefits failed to materialize. Worse, trading partners enacted measures that put U.S. businesses at a disadvantage.

The graph below shows the large stock losses for Trump’s favored industries. even as significant gains occurred elsewhere. Those gains reflected the continuing progress in the rest of the U.S. economy that more than offset the negatives.

The four favorites have large losses while stock market has positive return

Trump favored industries vs stock market from election to March 31, 2020


John Tobey (StockCharts.com)

Trump’s pet industries now exiting his tent

On April 1, President Trump’s daily briefings with his coronavirus task force had improved his multi-poll ratings (per FiveThirtyEight) to 45.8% approval and 49.7% disapproval, a spread of (3.9)% – his best readings since early 2017. Then started the waterfall of negatives – coronavirus worsening, declining interest in daily briefings, legal setbacks, convention location difficulties and an inability to conduct large rallies.

As a result, Trump’s multi-poll numbers have now slipped (as of July 15) to 40.3% approval and 55.6% disapproval, a spread of (15.3)%.

So, what’s happened to Trump’s favored industries during that 3-1/2 month period? Positive stock performance as his reelection prospects dim. Here’s the picture:

The four favored industries are all up since Trump's popularity peaked

Trump favored industries vs stock market since April 1, 2020


John Tobey (StockCharts.com)

So, why would Trump’s defeat boost the stock market?

First, start with the recent articles that have appeared, citing worry that a President Biden would reverse the 2017 tax cuts, thereby damaging the economy and stock market. Clearly, the stock market isn’t acting like that’s a risk.

Instead, ask the question, “Why would Biden do that?” Like the tax cuts or not, they had a positive economic and business effect.

Note: This type of reporting continues to be a problem – focusing on one, simplistic idea that has no basis, but can spur discussion and disagreement (and reader views, the main measure of an article’s “worth” these days).

Instead, we should expect the following actions will be taken up, all with the goal to right the U.S. ship of state and get it sailing straight and true again, allowing a rebuilding of support and trust:

  • First, through wise diplomacy, negotiate the reduction and removal of those “emergency” tariffs and the associated trade actions/reactions that have tripped up global trade well beyond steel, coal, etc. (Remember the $billions spent to partially compensate farmers for the “unexpected and unintended” damage done.)
  • Second, reverse Trump’s many executive orders that had no basis other than to appeal to his base. For example, allowing coal companies to pollute waterways.
  • Third, restore control within agencies (e.g., the EPA) by selecting qualified, unbiased leaders (ratified by Congress) to carry out their missions.
  • Fourth, restore the U.S.’s strong and leading position in regional and world groups like NATO and WHO. Supportive participation with wise diplomacy is the only way for the U.S. to get along with and benefit from the rest of the world.
  • Fifth, create that long-delayed infrastructure bill to both repair and modernize.
  • Sixth, rectify the many programs and operations that President Trump disrupted and then left in disarray – For example, climate change goals/strategies, health services/insurance, military missions/engagements, national park policies/management, voting policies/procedures and, of course, enlightened immigration/visa policies/procedures.

The growing possibility of those six beneficial items (and others) resulting from Trump’s defeat are what the stock market likely is focusing on. The 2016 view of “give a nonpolitical businessman a chance to drain the swamp and turn the U.S. into a win-win country” looks to have given way to “been there, done that – time to move on.”

The bottom line

If Trump’s reign as President is ending, his time in office may be bookended with stock market rises. Four years ago, Trump’s surprise win caused the market to run up. Today, it looks like the market is running up in anticipation of Trump’s defeat.

If he does lose, optimism could rise further, both here and abroad. In fact, his legacy may be that, in the end, he brought people together at an especially important time.

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Market TikTok

TikTok says it will exit Hong Kong market within days – CNBC

The Logo of social media app TikTok (also known as Douyin) is displayed on a smartphone on December 14, 2018 in Berlin, Germany.

Thomas Trutschel | Photothek | Getty Images

TikTok will exit the Hong Kong market within days, a spokesman told Reuters late on Monday, as other technology companies including Facebook have suspended processing government requests for user data in the region.

The short form video app owned by China-based ByteDance has made the decision to exit the region following China’s establishment of a sweeping new national security law for the semi-autonomous city.

“In light of recent events, we’ve decided to stop operations of the TikTok app in Hong Kong,” a TikTok spokesman said in response to a Reuters question about its commitment to the market.

The company, now run by former Walt Disney executive Kevin Mayer, has said in the past that the app’s user data is not stored in China.

TikTok has also said previously that it would not comply with any requests made by the Chinese government to censor content or for access to TikTok’s user data, nor has it ever been asked to do so.

The Hong Kong region is a small, loss-making market for the company, one source familiar with the matter said. Last August, TikTok reported it had attracted 150,000 users in Hong Kong.

Globally, TikTok has been downloaded more than 2 billion times through the Apple and Google app stores after the first quarter this year, according to analytics firm Sensor Tower.

The source said the move was made because it was not clear if Hong Kong would now fall entirely under Beijing’s jurisdiction.

TikTok was designed so it could not be accessed by mainland China. That was part of a strategy to appeal to a more global audience.

ByteDance operates a similar short video sharing app called Douyin in China.

Although there are no current plans to introduce Douyin to the Hong Kong market, a ByteDance spokesman said, the app already has a sizeable audience in the Asian financial center as Chinese on the mainland travel and stay in Hong Kong.

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Despite Market

Dow, S&P 500 gain despite bad NYSE market breadth – MarketWatch

The Dow Jones Industrial Average
DJIA,
-0.64%

and S&P 500
SPX,
-0.36%

are both rising in afternoon trading, despite NYSE internals indicating that market breadth is fairly negative. The number of declining stocks is outnumbering advancers 1,612 to 1,214 on the Big Board, and the volume of declining stocks represents 63.2% of total volume. But the Dow is up 37 points, or 0.1%, with 16 of 30 components gaining ground, and the S&P 500 is up 0.4%. Meanwhile, the Nasdaq Composite
COMP,
+0.14%

is surging 0.8%, amid mixed breadth readings on the Nasdaq exchange. Decliners are outnumbering advancers 1,704 to 1,426 on the Nasdaq, but advancing volume on the Nasdaq represents 57.2% of total volume.

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Market Stock

Stock market opens sharply lower Monday after worst week since March, with Dow down 500 points – The Washington Post

The stock market rebounded Monday afternoon to erase its sharp slide at the opening bell, with investors upbeat after the Federal Reserve announced it would buy individual corporate bonds.

The rally came after investors expressed initial concern that the novel coronavirus pandemic could be picking up in numerous states.

The Dow Jones industrial average started with a loss around 500 points, or 2 percent, shortly after it opened at 9:30 a.m. But it recovered those losses by shortly after noon and, following the Fed’s announcement, closed up 158 points, or 0.6 percent. The Nasdaq closed up 1.4 percent.

The rally was sparked by the Fed’s afternoon announcement, in which it said it would “begin buying a broad and diversified portfolio of corporate bonds to support market liquidity and the availability of credit for large employers.”

Previously, the U.S. central bank had only been purchasing corporate bonds that were part of exchange-traded funds.

Corporate bonds are corporate debt, and the Fed’s decision to pump money into this area is another way for it to help give companies more access to cash. But it could also open the Fed up to criticism that it is playing a role in picking winners and losers in the economy based on which firms it selects and which firms it opts against selecting.

The tech-heavy Nasdaq composite index and the Standard & Poor’s 500-stock index also jumped on the news after slipping into negative territory this morning. By 4 p.m., the Nasdaq was up 137 points, or 1.43 percent, and the S&P 500 leveled off around 25 points, or 0.83 percent.

Shortly after the market opened, the sell-off initially hit travel-company stocks hard, but by the afternoon, the stocks had come back.

American Airlines Group Inc. initially dropped nearly 5 percent but jumped back to less than one percentage point in the red by the time the market closed. Norwegian Cruise Line Holdings slid around 8 percent before ending about minus 2.5 percent by 4 p.m., and United Airlines Holdings dropped around 7.2 percent before recovering and closing down 1.6 percent.

These companies’ shares have been particularly volatile during the coronavirus pandemic because many people have been reticent to make travel plans when conditions remain uncertain.

The downturn continued last week’s slide, which was the sharpest plummet since mid-March, prompted by the health and economic crises, despite a hopeful Friday rebound.

As of Monday, at least 114,000 people had died in the United States of covid-19, the disease caused by the coronavirus, since February. At least 2,087,000 cases have been reported. Public health officials fear new surges after large Memorial Day crowds and protests in cities across the country and state reopenings.

“Wall Street’s bumpy road continues as investors continue to grapple with concerns that China is showing signs that a second wave of the pandemic is here and as a spike in new cases in the US could suggest many states could rollback their reopenings,” Edward Moya, an analyst with OANDA, wrote in an email to The Washington Post on Monday. “The stock market rebound will now go through a ton of scrutiny because the US economy was supposed to have a short stint in the ICU and be well into the rehab process by now.”

The Federal Reserve has predicted a slow recovery for the economy, with unemployment at 9.3 percent by the end of 2020. It has taken a number of extraordinary steps to help companies navigate the crisis, lowering interest rates and attempting to flood financial markets with cash.

“The problem for the economy is that the labor market will not bounce back as quickly as financial markets have initially provided,” Moya said. “The Fed is doing their part, but partisan politics have delayed the next fiscal response till after July 22nd, and that will erode at confidence.”

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fresh Market

So long, 33-day bear market — the bull is back and fresh highs are coming soon, says longtime strategist – MarketWatch

Key Words

Sun shining on Wall Street?


Getty


‘The market has been a ray of sunshine — basically investors being convinced that we’ll get out of this, and the economy will recover along with earnings… The economy may very well be catching up with the stock market rather than the stock market going off on its own.’

That’s Edward Yardeni, president of Yardeni Research, explaining to CNBC why he believes the historic May jobs report will ultimately be a game-changer for Wall Street.

Read:U.S. regains 2.5 million jobs, unemployment falls to 13.3% as economy starts to recover

In other words, he believes such a massive rebound in the employment number flies in the face of the popular notion that the rally is disconnected from what’s really happening in the economy.

This viral tweet pretty much sums up that disconnect:

“With the benefit of hindsight, [the jobs number] kind of makes sense because we had the Paycheck Protection Program that was basically implemented in April, encouraging small businesses to keep people on their payrolls,” said Yardeni, a longtime Wall Street investment strategist.

He added that, as long as no second wave slams the economy, he sees a V-shaped rebound, at least initially, driving the S&P 500 to record highs over the next couple months. Specifically, he’s looking for the S&P to breach 3,500 sooner rather than later, which is about 300 points higher from here.

“Not too long ago we were in the midst of a terrible meltdown in the stock market. But it turned out to be a 33-day bear market lasting from Feb. 19 to March 23,” Yardeni said. “Ever since then, we’ve had a melt-up that’s all related to the Fed coming in with what I call QE4-ever.”

Friday’s session sure had the look of a melt-up, with the Dow Jones Industrial Average
DJIA,
+3.15%

surging 829 points, while both the S&P 500
SPX,
+2.62%

and the technology-heavy Nasdaq Composite
COMP,
+2.06%

also logged substantial gains.

“It’s going to be a pretty broad bull market here,” Yardeni said. Watch the full interview:

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Market things

Top 5 Things to Know in the Market on Thursday, May 7th – Investing.com

© Reuters.
© Reuters.

By Geoffrey Smith 

Investing.com — Weekly data for initial jobless claims are expected to show a further slowdown, but remain at a staggeringly high 3 million. Stocks are set to open higher after a mixed bag of earnings late on Wednesday. China’s exports rebounded in April, but due largely to a one-off surge in medical goods. A 14% drop in imports still suggests its economy is in ropey condition. The Bank of England held fire but predicted the U.K. economy would shrink 14% this year. And the dollar hit a new all-time high against the Turkish lira as Turkey slides towards a full-blown balance of payments crisis. Here’s what you need to know in financial markets on Thursday, May 7th. 

1. Initial jobless claims set to slow a bit further

Another 3 million Americans are expected to have filed for jobless benefits last week, according to analysts polled by Investing.com.  

That would be a further slowdown from 3.8 million registered the previous week but still an indicator of extreme stress for the economy, following hard on the heels of ADP’s assessment that the private sector shed over 20 million jobs in April.

are expected to have risen by just under 2 million to 19.91 million.

The Department of Labor publishes its data at 8:30 AM ET (1230 GMT).

2. China’s exports post surprise rebound 

China’s posted a surprise 3.5% increase in year-on-year terms in April, confounding expectations for a decline of more than 15%.

However, the truer reflection of the state of the Chinese economy was in its data, which fell by 14.2% on the year, more than expected.

The discrepancy is explained by a surge in exports of medical gear to the rest of the world against the backdrop of the Covid-19 pandemic. Another growth item, noted analysts at ING, was components for 5G telecom networks, something likely to raise hackles in the U.S. given its campaign against Huawei in particular.

President Donald Trump on Wednesday repeated his threat to abandon the ‘phase 1’ trade deal with China if it fails to buy the promised volume of U.S. exports. That deal preceded the collapse of Chinese import demand.

3. Stocks set to open higher; PayPal disappoints, Peloton’s close to breakeven 

U.S. stock markets are set to open higher, reversing Wednesday’s losses and shrugging off some mixed earnings reports late on Wednesday.

By 6:30 AM ET (1030 GMT), the contract was up 320 points, or 1.4%, while the contract was up 1.5% and the contract was up 1.6%.

In focus in early trade will be , which failed to cash in on the boom in e-commerce to the degree expected in the first quarter, and , which failed to break even, disappointing hopes for a quarterly profit.

By contrast, , and Liberty Global (NASDAQ:) all beat expectations, the last of these topping off the quarter by agreeing to merge its U.K. assets with Telefonica’s (NYSE:) in a $38 billion deal on Thursday – the biggest piece of M&A in Europe since the pandemic erupted.

Peloton (NASDAQ:) stock is also set for a strong opening after it nearly in the quarter thanks to a boom in working-out-from-home, while rose in Europe after reporting a rebound in Chinese sales.

4. Bank of England holds fire, Norway cuts

The British pound edged up after the Bank of England held off from increasing its quantitative easing program – although new Governor Andrew Bailey indicated that it may well do so in the future. Two of the BoE’s nine policymakers already voted for an increase at yesterday’s Monetary Policy Committee meeting. The BoE expects U.K. GDP to fall 14% this year.

The BoE also signaled it was cutting U.K. banks more slack as regards their capital ratios, pushing up the shares of the big four by between 1.2% and 3.5%.

Prime Minister Boris Johnson is expected to outline a timetable for easing lockdown restrictions later, two days after the U.K. overtook Italy to register the highest death toll in Europe from Covid-19, with over 30,000 deaths.

Elsewhere in Europe Thursday, Norway’s central bank cut its key rate to zero but indicated it won’t go below that level.

5. Turkish lira falls to new low as crisis looms

Turkey, one of the world’s largest emerging economies outside China and India, is spiraling towards a balance of payments crisis.

The dollar hit a new all-time high against the overnight at 7.2862, before retracing to 7.2668 by 6:30 AM ET.

The country is beset by wide budget and current account deficits, and its banks and corporations have to repay over $20 billion in foreign-currency debt next year. Meanwhile, central bank reserves have fallen sharply and many analysts suspect official reserves figures to be inflated by the borrowing of dollars from the local banking system.

Turkey, a NATO member and long-time U.S. ally, was conspicuously not among the countries granted a dollar swap line by the Federal Reserve in March. Relations with the U.S. have deteriorated sharply in recent years, not least due to President Erdogan’s decision to buy sophisticated air defense systems from Russia. That worsening relationship may also complicate its efforts to negotiate an IMF bailout, analysts say.

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