Inversion Indigestion: Covenant’s Weekly Market Synopsis (August 16, 2019)

August 19, 2019

Last Week Today. Argentina’s stock market fell by a remarkable -48% in U.S. Dollar terms (-30% in local currency) Monday after the current reform-minded president was beaten badly by his left-wing rival in primary elections. Keep in mind this is the same Argentina that, despite defaulting on its debt eight times in the last 200 […]

Covenant Weekly Market Synopsis for August 8, 2019

August 12, 2019

Last Week Today. The trade war between China and the U.S. showed the first signs of conflating into a currency war when China allowed its currency to fall through 7 Yuan to $1 for the first time in eleven years, sparking a global equity market rout on Monday. | China’s provocation prompted the U.S. Treasury […]

Covenant Weekly Market Synopsis for July 12, 2019

July 15, 2019

Last Week Today. Minutes from the European Central Bank’s June meeting showed an improvement in Eurozone consumption. However, due to geopolitical factors and weakening global trade the ECB bankers are considering injecting stimulus via interest rate cuts and/or relaunching their $2.9 trillion bond-buying program. Not sure how taking the interest rate more negative (the official […]

Covenant Weekly Market Synopsis for July 5, 2019

July 8, 2019

Last Week Today. On June 29th President Trump and Chinese President Xi Jinping agreed to reinitiate trade negotiations – an outcome hoped for by the market, but evidently not fully priced as the S&P 500 reached a new record level last week. | The European Parliament nominated France’s former finance minister and current managing director […]

Covenant Weekly Market Synopsis for June 21, 2019

June 24, 2019

Last Week Today. President Trump and China’s President Jinping confirmed they will meet at the G-20 Summit this week in Osaka, Japan. | The White House disclosed it had explored the legality of demoting Federal Reserve Chairman Jerome Powell due to administration’s frustration with his unwillingness to cede to President Trump’s desire for lower rates. […]

Covenant Weekly Market Synopsis for June 14, 2019

June 17, 2019

Last Week Today. Mexico’s government agreed to move forward with adopting the USMCA trade agreement (aka, NAFTA 2.0) following President Trump’s announcement he would not levy illegal immigration-related tariffs on Mexico. | Two oil tankers were attacked in the Gulf of Oman, shortly after passing through the maritime bottleneck known as the Strait of Hormuz. […]

Covenant Weekly Market Synopsis for June 7, 2019

June 10, 2019

Last Week Today. The Department of Justice (Apple and Alphabet – aka Google) and the Federal Trade Commission (Facebook and Amazon) announced antitrust investigations into the market power held by large technology platforms. For a change, Republican and Democratic lawmakers agree on something – big technology companies are too influential in Americans’ political and economic […]

Covenant Weekly Market Synopsis for May 31, 2019

June 3, 2019

Last Week Today. S&P 500 earnings season concluded with corporations reporting year-over-year profit growth of roughly 1.5% in Q1. A pretty thin margin of expansion, but impressive relative to analyst expectations of a 4%-5% decline heading into Q1. | President Trump broadsided Mexico (and the markets) late Thursday Tweeting that the U.S. will put 5% […]

Covenant Weekly Synopsis for May 17, 2019

May 19, 2019

Last Week Today. German Bund yields went negative (again), reaching a 1.5-year low of –0.106%. | President Trump and his team began moving pieces on the global trade chessboard for countries not named “China”: tariffs on European and Japanese autos delayed for at least six months; steel/aluminum tariffs removed for Canada and Mexico; Turkish steel […]

Covenant Weekly Market Synopsis for May 10, 2019

May 13, 2019

Synopsis 2019.05.10 Last Week Today.  Trade negotiators for China and the U.S. failed to reach an agreement last week, an event well-covered by the media. However, on Sunday White House economic adviser Larry Kudlow revealed President Trump’s cognitive dissonance on tariffs when he conceded that China is not paying the duties as the President regularly […]