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On this week’s episode of Tape Talk, Quint and Daniel break down this week’s happenings in financial markets. Is Italy set to weigh on Europe (and the world)? Are the new tariffs good for markets? Where is there opportunity lurking now?
The White House was out his week with fresh news on tariffs. The new proposal targeted countries that would have been exempt in the prior round, with Europe and Canada being affected by the 25% steel and 10% aluminum price protection. Domestic producers of the metals reacted positively to the news on Thursday while users of the commodities faced headwinds. We’ll look at what this means for markets and trade going forward.
Italy was all over the headlines this week after a breakdown in the country’s political landscape raised questions about their future in the Eurozone. If the populist party gains strength in this year’s elections investors will be forced to consider a possible departure for the country from the Euro. This caused Italian debt yields to spike and stocks to retreat for fear of contagion. We discuss whether investors need worry or if this news is all headlines.
All About The Fins
The litmus test for where the markets are headed in the near term just might be financial stocks. While not as glamorous as the often talked about tech stocks (we’re looking at you FANG!) the financial sector often serves as the foundation for the rest of the market. In fact, it was this sector that was the first to turn lower before the Great Recession. We’ll dive into what the sector is doing here, what level might concern us, and what it all means for the market.
Small Caps and Energy Look Rosy
Volatility isn’t always a bad thing, it works to the upside too! There are a few areas that seem to be moving higher even as recent headlines point to headwinds for the market. Small caps, for instance, broke out to new highs even while the S&P still stands over 5% off its high. Also, as oil has been trending higher, energy stocks have rejoined the party and made some recent gains. We discuss these two areas and whether they might present an opportunity to investors or just a well-crafted trap.