Strong Market Rebound on Improving Data, Trade Deal Outlook

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Apr 5 – The word for this week was reassurance. Reassurance that China's economy may be bottoming, reassurance that a trade deal is getting closer, and reassurance that the U.S. economy is not decelerating into an imminent recession. In today's Financial Sense Newshour podcast, Ryan Puplava covers this week's events and also provides a technical update on the US stock market, including a look at how Financial Sense Wealth Management is navigating the current investment landscape.

Next, Jim Puplava speaks with Greg Weldon at WeldonLive about stocks, bonds, commodities, an inverted yield curve, the outlook for inflation, and MMT, or modern monetary theory. Weldon says MMT is the end game of monetary Armageddon and serves as a preview of things to come. Greg also discusses some of his recent investments in the commodity futures market and the areas he is most bullish and bearish on. Click here to find out more about Greg's upcoming Futures Trading Boot Camp.

Market wrap:

Chris: Let’s welcome back Ryan Puplava, here to talk about the key stories that moved the financial markets this week. And soon after, we will dive into the market technical report with Ryan as well to discuss opportunities and potholes to avoid in the market.

Ryan: Thanks Chris. I think a key word to describe this week was reassurance. Reassurance that China’s economy may be bottoming, reassurance that a trade deal with the US and China is almost ready to announce, and reassurance from economic reports that some spotty numbers we saw earlier in the year may be improving.

So Monday kicked things off on the reassurance of manufacturing data from China ticking in positive at 50.5 for the purchasing manager’s index - expanding for the first time since November. In the report, sentiment improved, inventories of inputs rose and firmer demand conditions were cited. There was also a renewed rise in manufacturing payrolls.

Then Wednesday we got China’s services PMI for March, also ticking higher to 52.9 from 50.7 in February. Inside the index the services business activity index jumped the most its see since January last year from 51.1 to 54.4. Foreign demand went up for goods with new export sales rising the second-strongest since December 2017. So all in all two great reports to reassure the Chinese economy isn’t rolling over hard. These reports had reverberating effects on commodities, industrials companies, and US. Stocks in general and some profit-taking in risk-off areas like Treasuries.

The second important story this week was from the Financial Times report Wednesday that said the US and China were roughly done with 90% of their goals. The last 10% remained in some of the more difficult topics like how to enforce the new agreement and forced technology transfers, but the tone of the agreement continues to sound constructive like when Vice Premier Liu’s comments about a new consensus has been reached. Still no announced summit date but the Wall Street Journal wrote Thursday it could be any day soon. These kinds of stories are keeping sellers at bay.

Finally, let’s talk about some of the economic reports this week for the U.S. including the major jobs report. So while the ISM manufacturing index ticked up in March to 55.3, the services ISM fell quite a bit, from 58.9 down to 56.1, the lowest point in the last year. Fortunately for the bulls the FT article on trade and services data out of China on the same day overshadowed the weakness. Then there was the jobs report which showed a solid bounce back from what appears to be a major outlier for the February report at 20k. The actual results for March were solid at 196,000 jobs added while the unemployment rate stayed the same at 3.8%

Next week will kick off the earnings season for Q1 earnings on Friday with the financials, JP Morgan, Wells Fargo, PNC Financial Services, and First Republic Bank with Citigroup, Goldman, Pinnacle reporting the following Monday. Reports were all over the map this week from weakness in Walgreens and Tesla deliver reports to better outlooks from Delta Airlines and stories around Taiwan Semi is seeing a rebound in chip orders, especially from AMD.

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