Week of May 4 2018 Weekly Recap & The Week Ahead
“The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.” – Jesse Livermore
1. U.S. Delays Tariffs on European Union, Canada and Mexico for 30 days — the Trump administration is delaying a decision about whether to impose steel and aluminum tariffs on the EU, Canada and Mexico until June 1, giving key allies a reprieve as the countries carry out further negotiations. The Iran deal is also on watch.
2. CFTC Chair Comments on Crypto Currency Regulation — according to CFTC Chairman J. Christopher Giancarlo, Bitcoin has “elements of all of the different asset classes,” stating that the popular crypto-currency is part currency, part security and part digital coin. “At the end of the day, it’s for Congress, and not regulators, to decide whether new policies should be evolved for these new asset classes… I don’t see it being resolved any time soon.”.
3. U.S. Trade Team Heads to China — A U.S. delegation led by Treasury Secretary Steven Mnuchin is on its way to China to discuss economic matters and the trade deficit. “Very much like North Korea, this should have been fixed years ago,” President Trump wrote in a tweet. Some economists anticipate that a short-term bargain involving the automobile industry and other previously announced moves could be struck. The yuan has weakened against the U.S. dollar for the fourth straight day with the trade talks just getting started.
4. FOMC Meeting Recap — the Federal Reserve held interest rates steady after its two-day policy meeting and said it will monitor inflation. The policy-making committee used the word “symmetric” twice in relation to its inflation target, in a potential cue to bond traders that a small overshoot past the 2% inflation target will be tolerated. The Fed noted that risks to the economic outlook are roughly balanced. “The FOMC statement reinforced market expectation for another 25 basis points rate rise in its June meeting,” said JPMorgan chief market strategist Tai Hui.
5. Iran Won’t Renegotiate Nuclear Deal — President Trump warns that unless European allies rectify the 2015 nuclear deal’s “terrible flaws” by May 12, he will refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic. Foreign Minister Mohammad Javad Zarif stated that “Iran will not renegotiate what was agreed years ago and has been implemented,”.
6. Berkshire Increased Apple Stake in Q1 by Adding an Additional 75M Apple Shares — Berkshire Hathaway bought 75M additional Apple (NASDAQ:AAPL) shares in Q1, with Warren Buffett outlining that the company “earns almost twice as much as the second most profitable company in the U.S.” The new investment brings its total stake in the tech giant to 240.3M shares worth $42.5B.
7. AAII Weekly Sentiment — according to this week’s sentiment survey from AAII, bullish sentiment declined from 36.91% down to 28.4%. While anything sub-30% is considered low, we actually saw a lower weekly print back in the first half of April, when bullish sentiment dropped down to 26.09%.
While bullish sentiment declined over 8 percentage points, bearish sentiment increased by less than 5 points. At the current level of 30.25%, it is nowhere near its recent high of over 40%.
The week ahead — Economic data from Econoday.com:
Tags: AAII Sentiment, FOMC Meeting