The 4th of July is one of the biggest holidays in America. Unlike many other major holidays, the United States is really the only nation in the world to celebrate it. That means that every other major equity market in the world is open for trading. With the major U.S. indexes hitting or challenging all-time highs and major milestones, it’s important to consider what the rest of the world’s markets were doing on a day when Americans were lounging around, having summer grill parties, and getting ready to go watch (or shoot) fireworks.
U.S. Treasury yields slid to two-year lows ahead of the day off as bets of higher global easing are taking hold and as the two new Federal Reserve appointees are expected to be dovish for the FOMC and expected to press for rate cuts. The U.S. 10-year Treasury was 1.953% and the 10-year Treasury yield was 2.47%.
Fed Funds are still in a range of 2.25% to 2.50% and the CME’s FedWatch Tool was last shown to have a 70.3% chance of a 0.25% rate cut at the July 31, 2019 FOMC announcement. That same FedWatch Tool showed a 32.2% chance that Fed Funds would be in a range of 1.75% to 2.00% and a 37.8% chance that Fed Funds would be in a range of 1.50% to 1.75% at the December 11, 2019 FOMC announcement — along with a 31.3% chance (largest by percentile) for a 1.50% to 1.75% range at the FOMC announcement next April.
As far as the record U.S. Markets, these were the closing index levels for Wednesday, July 3, 2019:
- DJIA 26,966.00 (+179.32; +0.67%)
- S&P 500 2,995.82 (+22.81; +0.77%)
- NASDAQ Composite 8,170.23 (+61.14; +0.75%)
- NASDAQ 100 7,857.69 (+57.87; +0.74%)
- Russell 2000 1,572.12 (+11.58; +0.74%)
Here are five all-American companies that should have strong sales around the 4th of July which are also expected to be solid investor ideas for the second half of 2019 and beyond. Here is a brief snapshot of major Asian and European markets along with the top news items of the day.
The Wall Street Journal reported that Hong Kong police arrested and charged a dozen protesters who were suspected of involvement in anti-government clashes and protests. It also reported that Japan has tightened export controls to South Korea, pressuring the supply chain for Korean-made technology products and heightening tensions between the two nations. Asian Markets (Closing Prices July 4):
- (Japan) Nikkei 225 21,702.45 (+64.29; +0.30%)
- (China) Shanghai 3,005.25 (-10.01; -0.33%)
- (Hong Kong) Hang Seng 28,795.77 (-59.37; -0.2%)
- (India) BSE Sensex 39,908.06 (+68.81; +0.17%)
With Christine Lagarde expected to take over the ECB from Mario Draghi in October, European bond and equity investors are expecting even more stimulus (on top of negative rates and buying every bond that is issued) and German Bund yields are even lower as the benchmark Bund went deeper into record negative territory. The German 10-year yield was last seen at -0.40% and the German 30-year yield was a positive 0.20%.
The Financial Times has reported that former UK chancellor Osborne is seeking backing to replace Lagarde as head of the IMF. The FT is also reporting that Boris Johnson is poised to become Prime Minister of the U.K., but its top story asks if he is up to the job. European Markets July 4 (roughly 2 hours to close):
- (U.K.) FTSE 100 7,610.54 (+1.22; +0.02%)
- (Germany) DAX 12,631.19 (+14.95; +0.12%)
- (Europe) Euro Stoxx 50 3,546.05 (+5.42; +0.15%)
- (France) CAC 40 5,621.74 (+2.94; +0.05%)
Currencies and Commodities:
- EUR/USD 1.128 (+0.01%)
- USD/JPY 107.804 (-0.009%)
- Nymex Crude $57.34 (+1.09; +1.94%)
- Gold $1,420.90 (+12.90; +0.9%)
- Bitcoin $11,873.37 (-$108.20; -0.90%)
That’s all for now. Go enjoy your day off, and probably Friday too…