The financial sector of the global market started with a great high in the New Year. It is expected that the high might not be able to last because there will be a big fall in the financial sector. The Financial Select Sector SPDR Fund XLF has seen a growth of 6.9 percent in the month of January 2019.
According to the data that was collected last week, all the sectors saw a growth of 4 percent. The health care industry was also being able to grow at 1.2 percent. The financial sector is showing healthy growth in 2019. The reports have confirmed that about 62 percent of the stocks in this sector are all moving towards a 50 day above the moving average. This data is better than any other sector in the index.
History has shown us that whenever there has been a steady growth in the financial market, it has been followed by a huge decline in the next six months. Bespoke has pointed out that it’s been 273 days since it was the last time financials led the market in sector breadth, marking this the fourth time financial wait since the 200 trading days.
According to the analyst:
“So, is this the beginning of a new period of outperformance for the sector? Don’t hold your breath. In the three prior periods where financials ended a streak of more than 200 trading days without having the highest percentage of stocks above their 50 days moving average, the sector not only underperformed the S&P 500 index SPX, +1.00% over the following three and six months, but it also traded lower every time.”
Tom Martin, who is basically the senior portfolio manager of the Global Investment lead the firm’s analysis of the financial sector, agrees with Bespoke and said:
“The financial sector performance year to date is a short term bounce from last year’s poor performance. Financials are a valuable segment of the market that depends on the strength on the strength of the economy and we have an economy that is decelerating which isn’t good for the sector.”
The financial market has been outperforming itself and this is the reason people are very sure that this will be short lived and people will end up loosing on their money if they invest it in Bank stocks.
There was a rise in stocks on Thursday when Netflix decided to lead a rally in tech-related names after the news broke out that Netflix will be able to reach the monthly membership prices. The Dow Jones Industrial Average saw a rise of 155.75 points to 24,065.59 after the companies like United Health and Microsoft outperformed.
There was also a gain of the S&P 500 at 1.07 percent and it ended up closing at 2,610.30. There was also a climb in the tech sector by 1.5 percent. Tuesday was the first time after the month of December 2018 that S7P 500 got closed above 2,600. There was also a rise of 1.7 percent to 7,023.83 in the Nasdaq Composite. There was a rise in most of the stocks after the United Kingdom decided to vote against the Brexit deal of the Prime Minister Theresa May.
The reason why people voted against the deal is that this might worry a lot of global investors and as a result, the economic market of the United Kingdom could take a hit. There was a growth of 6.5 percent in the shares of Netflix after Netflix announced that they will increase the monthly subscription by 13 percent to 18 percent. This will be the first time that Netflix will be going for a big hike in subscription since their launch.
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According to Credit Suisse:
“Investors will likely view this above Street estimate increase quite positively, bolstering confidence in subscriber trends, the pace of revenue growth and ability to achieve guidance for margin gains.”
All the big tech companies like Alphabet, Apple, Amazon, and Facebook also saw a rise of more than 2 percent each.
According to the head of the United States equity strategy at RBC Capital Markets Lori Calvasina:
“It’s now fair to say that downwards revision to 2019 S&P 500 EPS growth estimates has been a little worse than usual. The magnitude of the downward revision is now tracking a little bit worse than the median and average download revision that occurred from 2000 to 2017.”
The Dow saw a brief low earlier in the day because of the trade war between the United States of America and China, but at the end of the day, it was successfully able to pick up. The economy of the world is still in a very fragile state despite the market going up.
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With the start of the New Year, the health care stocks of the United States of America has been very much steady in nature. The Health care industry of the United States has been strong all across the year 2018. There was a rise in healthcare shares by 4.7 percent last year. This was the only sector which actually saw some kind of rise in the share market.
The share market of the US has been exceptionally slow and with the trade war going on, the economy of the country is also very much unstable. The reason why the health care industry has seen no such problem is that of the strong balance sheet and dividend payments. The economic growth of the United States of America is very much slow because not a lot of investors are investing their money on the economy because of the trade war between China and the United States of America.
The reason the trade war became such a big issue because the President, Donald Trump decided to increase all the tariffs of export which was beyond its capabilities. The managing director of the United States portfolio strategy at Bernstein said:
“We are trying things that skirt both of those two categorizations and healthcare is a really nice diversified earnings stream.”
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A lot of companies are there in the health care industry, which are the medical device manufacturers, manufacturers of prescription medicines, health insurer, hospitals, tools provided in hospitals and scientific research. The health care industry is very much important for the company and with the growth of the share prices, the future of the health care industry looks secure. The health care industry of the United States of America also encourages pharmaceutical companies and biotech firms to carry on research so that the industry is able to grow faster.
According to the sector head of health care for Federated Investors Martin Jarzebowski:
“Healthcare is one of the few sectors with high quality, above market growth and it’s relatively immune to the array of macro headwinds that we see out there.”
The country is now asking people to invest their money on health care because this is the only way they will be able to strengthen the economy of the country without having to think twice about the trade war or any other issued faced by the country. The health care industry has been able to outperform itself in 2018.
Asia Pacific markets have started their trading this week, mostly on the back foot in countries like Hong Kong, China, Singapore, and South Korea. The market of Japan is closed now because of public holidays. All the shares in Asia are much lower after the Chinese government shave shared their data and it has been seen that in the month of December, the exports and imports fell unexceptionally.
There was a slowdown in the world’s second-largest economy because of the trade war between China and the United States of America. The head of Asia economist at the Oxford Economics Louis Kuijs stated:
“China’s import slowdown was consistent with other signs that growth in the domestic economy was weakening. We think overall economic growth slowed further in the fourth quarter of 2018 and remains under pressure from weaker exports, slow credit growth and cooling real estate activity in the first half of 2019.”
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The trade surplus of China with the United States of America has closely seen a bitter trade war between Beijing and Washington. There was a growth of 17 percent since last year. According to the Recruiters, this is the highest on record dating back to the year 2006. The trade surplus of China was the lowest since 2013 according to the latest news agency reports.
The Shanghai composite slipped at about 0.49 percent with the Shenzhen component index, which had a fall of 0.59 percent. Before the open market, the Central Bank of China decided to set yuan midpoint at 6.7560 against the dollar. The shore yuan was traded at 6.7493 versus the greenback as of 10:49 am. The People’s Bank of China allowed the fall and rise of the exchange rate about 2 percent from the official midpoint, which is set by them on a daily basis.
South Korea saw a decline in the Kospi with nearly a 0.6 percent as all the tech names of the country saw a decline. Samsung which is basically the world’s largest smartphone manufacturer fell about 0.62 percent, while the famous chip maker SK Hynix tumbled about 4.15 percent. The internet form Navel saw a share fall of 3.82 percent. The Hang Seng Index of Hong Kong also went down by 1.42 percent and the Straits Times Index also saw a fall of 0.35 percent.
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There was a slight rise in the stock market this Thursday which ended up gaining a disappointing holiday sales from Macy’s and a revenue guidance cut from the American Airlines pressure retail and airline shares. Fearing the shut down of the United States government, this might continue for a long period of time.
There was a slight climb in the shares of S&P 500 with 0.4 percent to 2,596.64. This has been its five-day winning streak since the month of September 2018. The Dow Jones Industrial Average has also posted a five-day winning streak which rose to about 122.80 points to 24.001.92 as the Boeing outperformed. There was a Nasdaq Composition growth of 0.4 percent to 6,986.07. The shares of Macy’s have tanked more than 18 percent, which has been the worst day ever after they reported their sales growth at 1.1 percent in the month of November and December in the year 2018.
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There was a sharp decline in Macy’s, which has finally dragged down to the entire retail space. The SPDR Retail ETF has seen a drop of more than 1.5 percent. All the shares of Kohl fell about 4.8 percent while there was a Nordstrom decline of 4 percent. There was also a fall in the American Airline market by 4 percent. The American Airline industry has been struggling for a long period of time. People have been losing jobs at regular intervals on Airline companies because the company is not able to afford all the employees working.
According to an employee of an American Airline company:
“We are very happy that we still have a job, but we always go through the anxiety of losing our job.”
This goes on to show how much people are insecure about their job.
The Airline Industry has been suffering because of the trade war, which is between the United States of America and China. The trade war has caused a lot of loss in the economy of the global market. The United States of America is now in talks with China so that they are able to end this trade war. It is expected that once the trade war is over the economy will go back to normal.
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According to a famous economist:
“Trade war will take some time to end and after that, the economy will also need some time to adjust itself and come back to normal.”
The stock market has been very much unstable recently. The major reason why people have seen the fall of the stock market is that of the trade war between the United States of America and China.
Most of the nations have been affected by the recent trade war and this is the reason why the economy of most of the countries is unstable. According to experts, the stock market of the United States in December was the worst since the Great Depression. All the traders have ended up blaming the Federal Reserve for the fall of the trade market.
It has now been made clear that the market is mostly anticipating what is happening in the recent past. All the major companies of the world are cutting their profit forecast and also trying to temper exceptions so that their earnings growth from the previous year. Last week was basically the first day of trading of the year 2019.
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In the first week, Apple has come out and said
“Our first quarter sales will not be higher because they as a company is rearranging and it will take some time for us to get back our sales numbers.
There was also another report which has come to light which has created a lot of buzzes. According to the report, Apple has decided to cut down about 10 percent of the total iPhone production in the market because the sales have been exceptionally low at the end of 2018. This is a big step taken from Apple because it has not happened in the past that Apple has cut down their production because of lack of demand.
According to Beverage giant Constellation Brands:
“The fiscal year 2019 earnings per share would be $9.20 to $9.30, down from the range of $9.60 to $9.75 it forecast earlier. We are expecting weak sales in both the wine and spirits business in the next quarter of 2019.”
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The trade war is one of the major reasons why the stock market around the world is struggling a lot. People have seen a lot of changes in the whole sales numbers going down for a lot of companies because they not able to trade properly in the global market. It is expected that it will take some time for all the companies to recover their sales numbers.
The main Brexit news headlines in the morning newspaper “Telegraph” read that the United Kingdom officials have put out feelers on the possibility of extending Article number 50 over concerns that a Brexit deal will not be in place on the 29th of March 2019.
The sense from Brussels has always been there and there would be ready on the European Union side so that they are able to accommodate the delay. The last important thing that the government of the United Kingdom can do before the Parliament vote next week is to acknowledge any kind of planning.
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The Brexit minister has finally been on TV and denied everything. The assembly will be there today to vote in an attempt by all the lawmakers to cut off all the funding to the government in the event that there is no Brexit deal. This amendment would not exclude any kind of possibility of a no deal outcome, but according to the backers of the deal, it will be less likely to prevent the government from executing all the damage limitation measures.
There is more bad news for the economy of Germany because this morning, the industrial output unexpectedly fell for the third time this month. All the data which are collected from the Federal Statistics Office show that the industrial output was at a down of 1.9 percent.
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The economy of all the countries has suffered in a major way as an aftereffect of the trade war going between the United States of America and China. Both the countries are considered as the most popular countries in the world and this is the reason almost every country is suffering a lot because of the fall of the economy.
Most of the countries are not able to make any kind of growth. The economy of all the countries is generally unstable and this is the reason there is absolutely no stability in the economy. The global trade market is at a standstill now. It is expected that the economy will take some time to stabilize itself.
It will not be easy to stop the trade war, but it will take time and patience from the people. The Trade war has already created a lot of fuss in the global market.
According to the employment data, which is very strong in nature in the United States of America have taken a decisive action from the Central Bank of China and a dovish message from the chief of the United States Federal Reserve Jerome Powell by steading the market today and finally ending up pushing the index of the world stock to about 2-1/2 week high.
There has been a lot of resumption of talks between China and the United States of America so that the tariffs can all be restored and it will leave some optimism for the market, which has been struggling for quite a long period of time. The shares of Europe have been in red for almost all of Monday, but the stock market will be still closing at a three-week high point after there was a huge growth in the market last Friday.
The equity index of the world MSCI, which is known to track shares in a total of 47 countries is known for having the highest level in a 2-1/2 week and it will still be about 6 percent higher than in the month of December 2018. It has simply been a reminder that the central bank is basically has a lot of firepowers to deal with a much lower growth prospect and also get some kind of return of liquidity as all the investors will be returning from all the holidays.
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According to Philip Shaw the Investec economist, all the investors are now on holiday and all the investment will only be resumed after the holiday season is completely over. He has also come out and announced that the global market is still at a risk and it will be harder to recover it. It will take a longer period of time to solve the trade war between the United States of America and China.
The United States of America is trying to maintain its economy and letting investors invest in different companies. The United States non-farm payroll data was able to create the biggest number of jobs in the month of December. A total of 312,000 new jobs were created which help the annual job growth to increase at a pace of 3.2 percent.
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It is time for each and every country to make attempts and maintain their countries’ economy from the trade war.
There was a slight rise in the Dow Jones Industrial Average with 18.78 points, which is equal to 0.08 percent.
Wall Street was able to edge higher on Wednesday after it had stumbled out of all the starting gate on the first trading day of the year 2019. The first trading day started with the fear of global economic shutdown and Apple announced that they will no longer forecast their quarterly revenue by the year 2019. This announcement from Apple has made them lose almost 8 percent the very next day.
The reason why Apple made this decision is that they want to keep the stocks of Apple stable. Every 3 months, Apple announces their forecast, but this time it was not able to reach it because of some reason and the share prices go down. If Apple does not forecast, then there will be no expectation that they will have to meet for the public eye. Apple did not have a great year in 2018. Apple was not able to sell a lot of phones.
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Apple launched three new devices in the year 2018. The iPhone XS, the iPhone XS Max, and the iPhone XR. None of the phones were selling fast and this is the reason Apple had to slow down the production of the phones. Apple has been dominating the smartphone industry for a long period of time, but nothing went right for them in 2018.
Apple stock prices hit rock bottom because of the sales number going down and they were not being able to reach their forecast. Apple has made a very bold move to not disclose their forecast of revenue from now on so that they are able to keep their stock prices stable.
Another reason why the economy of the global market is suffering is that of the United States and China trade war. A lot of companies are suffering hugely because of the trade war. It is almost impossible to win a trade war and it ends up doing a lot of destruction of the economy of the country.
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It is expected that Apple will be able to get their stock prices back to normal in the year 2019. Apple had already had a great start with the year 2019 after they made record sales revenue on their app store purchases on New Years Day.
Apple is now facing one of the biggest fears faced in Wall Street. There was a drop of 660 points in down on Thursday after After Apple was unable to reach the expected sales numbers for this quarter. This has resulted in the growth of a lot of trade tension in China.
Apple is now one of the most widely held stocks in the market and it is now going through a big fall. The reason why Apple is struggling so much in Wall Street is that it is not able to reach its sales numbers. All the big companies like Amazon, Microsoft, and Google are stable.
Apple has released three new phones last year which are not doing great in the global market. Apple has also slowed down their production of new iPhones because they are not able to sell the phones as fast as they have expected. On Wednesday, there was a slight rise in the market, but this is not enough compared to the fall the market has seen recently. It will be harder for all the companies to bounce back in a short period of time.
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The people who have invested in Apple have seen a huge decline in the market and are not confident now. The ISM manufacturing index has been low for two years. The United States and China trade war is now the biggest reason for the unstable economy of the country. Most of the companies are facing a lot of loss because of the trade war. According to experts, trade wars cause a lot of damage to the economy and is much harder to win.
The tension because of the trade war between the United States and China has created an unnecessary toll for a lot of companies. The global market is also affected hugely because of the trade war. All the shares of companies like Tiffany, Boeing, Qualcomm, and Deere has retreated because of their sensitive nature.
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The Apple news has said that they are now feeding fears of slowing down global growth. Investors have now tried to get their hands on different government bonds so that their investment is kept safe. The treasury has seen a sharp decline of about 3.23 percent in the month of November last year because of the trade war.