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July 9, 2019 The Week: On Monday, the Federal Reserve announced that it was cutting interest rates for the first time since the financial crisis. The cut was seen as a response to the economic slowdown that has been seen in the U.S. and around the world. The Fed also indicated that it may cut rates further if needed. The news sent stocks soaring, and the U.S. dollar fell sharply against other major currencies. On Tuesday, the Federal Reserve released its quarterly economic report, which showed that the U.S. economy is slowing. The report showed that consumer spending, business investment, and exports were all weaker than expected. The report also showed that inflation has been running below the Fed's 2% target. On Wednesday, the Federal Reserve released the minutes from its June meeting, which showed that officials were split on the decision to cut interest rates. Some officials argued for a larger cut, while others felt that a smaller cut was sufficient. The minutes also showed that the Fed was divided on what to do next, with some arguing for further rate cuts, while others were hesitant to do so. On Thursday, the Labor Department released its monthly jobs report, which showed that the U.S.
Unless economic data this week deliver some blowout upside surprises, markets may feel most comfortable aligning more or less with the Fed dot plot (50 bps of additional cuts vs 43 bps priced in now). First dollar resistance is situated at EUR/USD 1.076 (October low). Sterling is biding its time in a narrow EUR/GBP 0.83-0.835 trading range ahead of tomorrow’s Budget. UK gilts yesterday underperformed in a possible sign of market nervousness.
Aussie fell broadly today as pressured by a combination of factor. A significant contributor is the strengthening greenback, supported by expectations of slower-than-anticipated Fed easing cycle and rising yields driven by US presidential election considerations. Another factor weighing on Aussie is the waning enthusiasm for China's stimulus measures, mirrored in sluggish performance in Chinese and Hong Kong equities.
Gold holds just below its opening price, constrained by US 10-year Treasury yield rising to 4.272%. Traders await US Nonfarm Payrolls, Q3 GDP, and the PCE Price Index, which could influence the Fed's policy outlook. Political and geopolitical tensions linger as election polls narrow; though Israel’s conflict with Iran woes begin to fade. Gold traded
In this episode, we dive into our conversations with Meb Faber, analyzing some of his most interesting takes on investing and wealth management. We explore several clips from our interviews where Meb shares perspectives that often challenge conventional wisdom, including his thoughts on dividend investing, trend following, and the Federal Reserve. We discuss: – The limitations of dividend-focused investing strategies – Asset allocation insights from the Talmud – A different perspective on the Fed’s recent… Read More