Daily Commentary From Altavest

[Altavest_Erik]

July 09, 2018

China’s Finance Ministry committed to deepening reform and opening its markets. Asian markets settled higher. The Nikkei 225 climbed +1.21% and the Shanghai Composite jumped +2.49%. The Eurozone July Sentix investor confidence survey rose unexpectedly. European equities and currencies fluctuated on Brexit news. The DAX finished higher by +0.38%. Yields on 10-yr. Bunds moved up to 0.305%. May Consumer Credit growth was much stronger than expected, up +$24.6B. Yields on 10-Year Notes rose to 2.858%. The US$ Index was mostly flat. August gold rose +0.3% to $1,259.60. At the end of an up-and-down session, August crude was up +$0.05 to $73.85. U.S. equities got off to a solid start as market fears were trumped by Friday’s strong jobs report. Ignoring Brexit turmoil, trade-war escalation, and uncertainty around North Korea’s nuclear program, markets rode the back of earnings expectations to strong gains. While the gains were strong, volumes was decidedly on the light side. With no willing sellers, averages remained elevated throughout the session and closed at the highs with broad-based gains.

 

[Altavest_Erik]

July 11, 2018

President Trump announced tariffs on $200B of China imports. Japan data was mixed, with PPI up +0.2% m/m and +2.8% y/y. Asian markets settled mostly lower. The Nikkei 225 fell -1.19% and the Shanghai Composite tumbled -1.78%. European equities were shaken by the heightened trade rhetoric. The DAX fell hard, losing -1.53%. Yields on 10-yr. Bunds managed to hold mostly steady, easing to 0.308%. May Wholesale Trade just beat consensus at +0.6%. June PPI rose +0.3% (core +0.3%), hotter than expectations. Last night’s API report showed a draw in crude inventories of -6.8M barrels while this morning, the EIA reported a staggering draw of -12.6M barrels. Yields on 10-Year Notes eased to 2.842%. The US$ Index moved higher. August gold slid -0.9% to $1,244.40. Despite the big draw, August crude fell hard, losing -5.0% to $70.38 Equity markets were shaken by President Trump’s announcement on tariffs for an additional $200B of Chinese goods and traded sharply lower overnight. After trimming the losses from the extreme, averages traded sideways through the day waiting on further developments. On good volume, markets closed moderately lower.