Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Chief Macro Strategist
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Morning Brew July 17 2024
Erik Schafhauser
Senior Relationship Manager
Summary: Gold and Dow at all time highs, Russel strong as traders digest the Trump Trade
Good Morning all,
The Trump trade is settling in and rate cut hopes fuel small and midcaps. The Dow gained 1.85%, the S&P 0.6% and the Nasdaq 0.20%, the Russel 2000 even 3.5%. The Russel nit the highest level since 2022 while the Dow hit a new all time high. Financials reporting yesterday were a little mixed in results, Bank of America rose more than 5%, Charles Schwab declined 10%, Interactive Brokers reported after hours and changed little. Big Tech gave up ground with Microsoft, AMD and Nvidia down between 1 and 1.6%. Volumes were once again strong at 11.8 billion.
US retail Sales came better than expected yesterday, at the same time, the expectation of a rate cut in September is now at being traded at 100%. this weighed on the USD and 10-year yields fell to 4.17. EURUSD is 1.0897, GBPUSD 1.2970 and USDJPY 158.04. Gold and Silver were in demand yesterday, Gold hit a new all-time high at 2483, Silver traded to 31.40. This morning both are lower at 2464 and 30.85.
We have a few interesting data points out today, key likely being the EU Inflation as the last input ahead of the ECB rate decision tomorrow, any statements from Trump or his allies will be closely watched. He stated in a Bloomberg interview that he expects Taiwan to pay for it`s own defenses and that the US are considering toughest restrictions on companies giving China access to top of the line technology. This statement wiped app. 30 billion off TSMC`s Market cap.
Any hints on Trumps policy goals will likely have the strongest market impact unless there are other surprises or key events, EU Inflation and the Fed`s Beige book are of importance as well.
Wednesday
- Data Japan Tankan, AU CPI, UK CPI, US Housing starts & Industrial Production, Fed Beige Book, Waller & Barkin speak
- Earnings: ASML, US Bancorp, United, Alcoa, KinderMorgan,
Thursday
- Data UK Labor data, ECB Rate decision, Initial Jobless claims & Philly Fed Business, Logan speaks
- Earnings: TSMC, Nokia, Netflix,
Friday
- Data Japan JPI, UK retail Sales. Bostic speaks
- Earnings: American Express, Halliburton, Travelers,
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