Trade Summit, Fed Decision and Earnings Move the Markets

There has been a decidedly mixed response from investors following yesterday’s Fed meeting. Although the US central bank announced a 0.25% interest rate cut as expected, and that it will end its Quantitative Tightening program on December 1st, remarks from Chair Powell that a rate cut in December is not a foregone conclusion sent stocks into a tailspin.

This morning finds US index futures down 0.1% to 0.3% with Dow futures the weakest so far. In Europe today, the FTSE is down 0.6% and the DAX is down 0.2%.

The summit meeting between US President Trump and Chinese President Xi appears to have made some headway related to rare earths, fentanyl, and soya beans; with the result generally being described as a truce as the two sides continue to talk trade. Chinese markets lost ground overnight with Hong Kong falling 0.25% and Shanghai losing 0.75%.

Commodities are backsliding with Crude Oil down 0.6% and Copper down 1.7% so far today, suggesting ongoing concern about the future of resource demand. Precious metals are mixed, with Gold down 0.1% and Silver up 0.2%.

Today and tomorrow represent the peak of earnings season for big cap stocks. Last night it was all about Big Tech with results from Alphabet* ($2.87 vs Street $2.27, up 8.9% premarket), and Microsoft ($4.13 vs Street $3.67, down 2.00% premarket) crushing expectations. On the other hand, Meta Platforms is selling off after a big miss, down 9.3% premarket.  This morning is headlined by Big Pharma, including results from Merck ($2.58 vs Street $2.35, down 2.8% premarket) and Eli Lilly ($7.02 vs Street $5.69, up 4.0% premarket).

After the close this afternoon, results are due from Apple and Amazon.com. Tomorrow morning is Big Oil’s turn featuring results from Exxon Mobil, Chevron, and Imperial Oil.

*Shares of Alphabet are held in some portfolios managed by SIA Wealth Management.

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