The markets continue to rebound from the selloffs last week. Financials, energy, and tech were the big gainers, as financials and energy had been pretty oversold, and tech got a little shot in the arm when Trump said that the ban on Huawei would not take place for another 90 days, and also that Apple CEO, Tim Cook, made a “good case” against Chinese tariffs when they talked. Additionally, corporate leaders have announced that earnings and shareholders are not their primary focus anymore, it will be delivering value to their customers, employees, and suppliers. It sounds like they hope to look for more long term sustainability in order to create long term benefits to their communities and the economy. The feel good day ended with all 11 S&P sectors in the positive and the Dow moved up 249 points as it closed at 26,135.
In order to keep the economy going, lawmakers are focusing in on trade. However, instead of that focus going to China, they are looking to complete the USMCA deal, then finalize deals with Japan and the U.K. Should the U.S. be able to accomplish that it would start to put pressure on China, as it would make the U.S. even less dependent on China, especially as suppliers have already begun to move to other neighboring Asian countries.
Utilities are the like the roaches of the stock market – they seem to be surviving everything. Even last when the markets were trading off, this sector held up reasonably well. With bond yields sinking lower than whale poop, investors are looking for any area that generates yield and cash flow. But the one roach that keeps getting pounded by the proverbial market flip-flop is PG&E, the northern Cal utility. Their stock got stamped again after a judge ruled on Friday that a jury could decide if, and how much, of a responsibility the utility had in the 2017 Tubbs wildfire. PG&E could be on the hook for up to $18 billion in damages. Their stock plummeted as much as 30% during trading.
The lunkheads had International Scout Night this weekend, so they had a good time swapping stories and chowing down with other scouts from England, Portugal, Cypress, France, and St. Scellyenes, which is a tiny island off the east coast of Africa. They have also been out hiking, where Bill has had a chance to become one with the cows by roaming on all fours eating grass. You can see the latest photos on the Greystone Facebook Page.