Potential slowdown

As reported by CNBC, Morgan Stanley (MS) equity strategist Michael Wilson said that investors should “remain defensively positioned,” as last week’s yield curve inversion was bearish for stock markets (DIA) (IVV).

Morgan Stanley: ‘Get Defensive’ on Inverted Yield Curve

Inversion of the Treasury yield curve

The Treasury yield curve turned negative on March 22, with the ten-year yield falling below the three-month yield for the first time since 2007. Yields on short-term securities surpassing yields on long-term securities (AGG), a “yield curve inversion” (BND), spooks markets because it has predicted recessions. According to the Federal Reserve Bank of Cleveland, yield curve inversion has predicted each of the last seven recessions. However, investors should note that there have been some false positives.

Factors pointing to a slowdown

Last week’s weaker-than-expected Eurozone data (HEDJ) (EZU) and the Fed’s dovish tone may have been the main factors behind the yield curve’s inversion last week. The risk-off sentiment created by weaker economic data, ongoing US-China trade concerns, and Brexit uncertainties drew investors to bonds, driving long-dated security yields lower. Meanwhile, yields at the shorter end of the curve were pressured by the Fed’s no-rate-hike signal for this year and increased odds of a rate cut.

Stock markets (SPY) (VTI) fell on March 22 due to global slowdown concerns. Markets are concerned that prolonged weakness in Europe and China and ongoing US-China trade tensions could lead to a recession in 2019 or 2020.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.

172.31.16.229