Trump’s new tariffs hike goes into effect over the weekend (September 1) and given last weekend’s string of tweets how many traders are keen on taking risk into the weekend? We continue to argue that traders should not take the risk over the weekend and investors should increasingly turn portfolios defensive.
Is Brexit chaos coming?
Yesterday was another eventful day in London as the UK Prime Minister Boris Johnson advised the Queen to suspend Parliament raising strong discontent due to its timing leading up to the new Brexit deadline on October 31. The political developments around Brexit but also Italy are strong arguments for our continued stance that investors should underweight the European value trap in equities.
S&P 500 earnings momentum still surprisingly strong
Despite all the weakness being thrown at equity markets from macro fundamentals we were surprised to note yesterday that S&P 500 is still seeing EBITDA growth around 5% y/y. The slowdown in profit growth even seems to be stabilizing contrary to the sharp decline in 2015 due to rapidly falling oil prices that cut profits in the energy sector.