Tuesday was sort of a lackluster session on the surface. However, it was powerful beneath the surface, as buyers shifted from high flyers (sending weighted indices lower) and moved into other niches of the stock market. There were a combined 516 new 52-week highs against only 35 new lows on the NYSE & the NASDAQ Composite. There were more winners than losers in the NYSE and the NASDAQ. And the volume was overwhelmingly positive:
- NYSE: Up volume: 1.69 billion vs Down volume: 1.21 billion
- NASDAQ: Up volume: 1.30 billion vs Down volume: 890 million
The Biggest Hurdle
Don’t look now, but more than 80% of names on the S&P 500 are trading above their 200-day moving average. It’s not as uncommon as it might seem, but it’s the first time it happened since September 2014, which means this better be a great earnings season.
Small Business Optimism
The National Federation of Independent Business (NFIB) Optimism report is an important read for all investors. Yesterday’s release was in line with the consensus estimate and it’s still among the highest levels ever.
Wanted: A Good Man or Woman
The big problem for small businesses remains in finding qualified workers. Government regulations have come down a ton from where they were a couple of years ago. I’m concerned more about business owners who point to taxes as the single most important problem from a year ago. However, few business owners are worried about poor sales or finance rates.
Phase One
Could today’s trade news rekindle a cross-border foreign direct investment (FDI) between the United States and China? There is no doubt China’s investments in the United States were climbing. And there is also no doubt China read the 2016 election tea leaves better than the American media and spiked its investment efforts that year and the next year, ahead of the official launch of the trade battle.
Overall, from 1990 through April 2019, the United States invested $276.38 billion in China, and China invested $148.33 billion in the United States. I’m sure U.S. businesses are eager to test new rules prohibiting forced transfers and even make more acquisitions.
China to U.S. FDI: $148.33 billion
Investor | Type | Stake | |
Greenfields $11.32 | Private $113.42 | Strategic $114.76 | Controlling $126.12 |
Acquisition $137.01 | State Owner $35.91 | Financial $33.57 | Minority $22.21 |
U.S. to China FDI: $276.38 billion
Entry | Investor | Type | Stake |
Greenfields $195.69 | Private $276.38 | Strategic $241.98 | Controlling $181.98 |
Acquisition $80.70 | State Owner $.005 | Financial $34.40 | Minority $94.40 |
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