Please note that today’s edition of the newsletter includes Wednesday’s Top Picks (in addition to Thursday’s) which were added to the site late because of the China Trade Deal press conference.
Markets soar in wake of trade deals
At last. Phase one of the long-waited U.S.-China trade deal was signed Wednesday after two years of tariffs, tension and angry tweets. As soon as the deal was announced last month, markets baked in the good news and rallied to record highs. However, there remains at least a phase two, with negotiations set to begin immediately. Investors are not out of the woods yet and should expect volatility.
Major indices in Toronto and New York soared Thursday as the U.S. Senate passed the USMCA (aka the new NAFTA) deal. USMCA now sits on Trump’s desk, waiting to be signed. Tech led Thursday’s rally; the Nasdaq leapt as 1.06% as all three major New York indices made record closes. Similarly, the TSX closed at record highs in back-to-back days, nearing touching 17,500.
Earnings season continued with Morgan Stanley reporting a blow-out quarter, and shot up 6.61% in trading. After hours, Gap announced it would stop spinning off Old Navy and issued positive guidance, and shot up over 10%. The TSX gained in every sector except materials. Among the top gainers: Stuart Olson jumped 5% and Boyd Group leapt 3%. The rare bad news Thursday came from Bombardier, which–despite heavy government subsidies–slashed its outlook and plunged 24% by day’s end..