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Weekly Feed Mins Read

Kristal Weekly Feed | 19th August, 2019

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All you need to know, in under 1 minute.

Here’s a concise report on what made headlines in the global market last week.

Positives

  • US Retail Sales rise in July
  • Nvidia jumps 7% after earnings beat analyst expectation

Negatives

  • Argentina Credit Rating gets cut after populist opposition wins the election
  • Markets in red for the third week as bond markets signal recession

Now, for more detail.

Positives 

1.US Retail Sales rise in July

What You Should Know

U.S. consumers spent more at retail stores and restaurants in July as retail sales rose 0.7% in July after rising 0.3% in July, a sign that concerns over slower global growth that have roiled financial markets haven’t dampened consumer confidence.

What You Should Lookout For 

Consumer spending, the primary driver of the U.S. economy, is strong even as other sectors of the economy, have weakened in light of growing uncertainty over the U.S.-China trade war, and slowing economic growth. Moreover, job growth is steady, with the unemployment rate at a 50-year low, and wages rising, boosting Americans’ spending power.

Suggested Reading:

US retail sales rose solidly in July in a sign of consumer optimism

2. Nvidia jumps 7% after earnings beat analyst expectation

What You Should Know

Nvidia stock rose 7% on Thursday after the company reported better-than-expected fiscal-second quarter earnings. Earnings were $1.24 per share compared to an expectation of $1.15 per share whereas Revenue was $2.58 billion as compared to $2.54 billion as expected by analysts.

What You Should Lookout For 

Nvidia says that in Q3 it expects $2.90 billion of revenue, a 9% annualized decline, and below the $2.97 billion estimates by analysts. Gross margin is estimated to be 62.5% by Nvidia compared to analyst expectations of 60%.

Suggested Reading:

Nvidia jumps on earnings beat

Negatives

1. Argentina Credit Rating gets cut after populist opposition wins the election

What You Should Know

Argentina was downgraded deeper into junk territory by two S&P and Fitch as markets brace for a possible default after the populist opposition won a landslide victory in the election. Argentina saw the peso fall to a record high of 60.24 against the US Dollar, while the benchmark equity index suffered one of the worst days in 70 years falling nearly 38% and the yield on bonds spiked to an all-time high.

What You Should Lookout For 

Currently, Argentina has $33.7 billion in foreign-currency debt payments due by 2019 end. Fitch said it expects Argentina’s federal government debt to GDP climb from 62% in 2018 to around 95% this year, without factoring in the risk of a further slide in the currency. Argentina is also expected to contract by 2.5% by the year-end.

Suggested Reading:

Argentina Slammed by Double Downgrade at End of Traumatic Week

2. Markets in red for the third week as bond markets signal recession

What You Should Know

S&P 500  has lost 4.5% from its July 26 record high and recently posted its two worst days of 2019. Markets are facing a long list of problems. Apart from central banks rushing to add stimulus, there is US-China trade war raging and the concern that earnings growth will be zero in 2019. Moreover, the yield on the 10-year Treasury yield broke below the 2-year treasury yield, a sign of recession.

What You Should Lookout For 

Major stock indexes posted their third straight weekly losses with the S&P 500 and dow jones down 1% for the week. Trade war rattled the markets when  Trump threatened to slap those new tariffs on the rest of Chinese goods and Beijing promised it would counter the latest tariffs on $300 billion of Chinese goods.

Suggested Reading:

Swagger Seeping Out of Stocks as Bond Market Signals Get Louder

 

Disclaimer

The materials and data contained herein are for information only and shall in no event be construed as an offer to purchase or sell or the solicitation of an offer to purchase or sell any securities in any jurisdiction. Kristal Advisors does not make any representation, undertaking, warranty or guarantee as to the update, completeness, correctness, reliability or accuracy of the materials and data herein. All opinions, forecasts or estimation expressed herein are subject to change without prior notice. Kristal Advisors and its affiliates accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecasts, materials and data contained herein or otherwise arising in connection therewith.

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