![]() Each company notched up an earnings beat, with a string of positives overlooking a lower interest rate outlook. In the end, while the 25 basis point cut was foreseeable, the hawkishness of the panel was surprising, with dissenters voicing concerns and also suggesting we aren’t about to see a cycle of cuts.īetween JP Morgan Chase (JPM), Goldman Sachs (GS), Bank of America (BAC) and Citi (C) the financial sector put in a solid set of earnings results. Clouding this outlook was strong consumer spending and jobs data from June, as well as a better-than-expected 2.1% GDP reading in the second quarter. With many, including us, forecasting a cut by month’s end, conjecture remained to the aggressiveness of the cut. However dominating headlines last month was interest rate speculation. It proved to be a rallying cry for the health stocks that make up the Dow Jones, with the fundamental outlook for many of them now much clearer and compelling even if markets are caught in the midst of trade angst. The Trump administration’s decision to back away from plans to cut pharmaceutical rebates was a welcome (and sensible) development. Volatility is likely to remain in the short term, with an almost unpredictable ruction caused by the games. We saw by the month’s end, and in recent days since, just how vital this is for markets to hold this level. When it’s not, boy do we wish this debacle would be put to bed already. And when everything is quiet, it’s perfect. One of the bright spots early on was the resumption of trade talks between Beijing and Washington.
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