Week of May 26 2017 Weekly Recap & The Week Ahead
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” – Victor Sperandeo
1. TPP Nations Pursue Deal Without U.S. — the 11 members of the Trans-Pacific Partnership have agreed to pursue their trade deal without the U.S. at a forum of the Asia-Pacific Economic Cooperation. U.S. Trade Representative Robert Lighthizer said at the conference. “Bilateral negotiations are better for the U.S. than multilateral negotiations.”
2. Trump’s Unveils First Budget Proposal — President Trump’s first full budget proposal lands on lawmakers’ desks this past week, with an estimated $3.6T in spending cuts over the next decade. Congress will still be allowed to spend $4.1T in 2018, including a big boost to defense, border security and infrastructure, while cutting Medicaid, food stamps and other social programs. The plan also calls for selling half of the nation’s Strategic Petroleum Reserve and permitting drilling in the Alaska refuge.
3. MSCI Sets Date for Chinese A-shares Decision — MSCI will announce on June 20 whether it will finally include China’s domestic A-shares in its $1.5T Emerging Markets Index (ETF: EEM) as Beijing tries to open up its markets and attract foreign capital. The index provider last June delayed the decision for a third straight year, citing regulation worries and accessibility for global investors.
4. Moody’s Downgrades China Rating to A1 from Aa3, Citing Concerns Over a Slowing Economy and Growing Debt — Moody’s Investors Service downgraded China’s credit rating to A1 from Aa3, changing its outlook to stable from negative, citing concerns efforts to support growth will spur debt growth across the economy. Moody stated that the catalyst for the downgrade was a combination of factors, including expectations that potential growth would fall to 5 percent by the end of the decade. It was Moody’s first downgrade for the country since 1989, according to Reuters.
5. OPEC Agrees to Extend Crude Output Caps — OPEC renewed an agreement to withhold some crude-oil supplies into March 2018. With over a dozen other countries expected to join the cartel’s efforts, the agreement is likely to cut off about 2% of the world’s oil supply through March 2018, extending a decision the OPEC-led coalition reached last year.
The week ahead — Economic data from Econoday.com:
