President Donald Trump said on Monday that China is ready to come back to the negotiating table and the two countries will start talking very seriously.Politicsread more
The escalating trade war between Washington and Beijing dominated discussions at the G-7 gathering in France.Politicsread more
China's state media is putting up a brave front as the country's trade war with the U.S. escalated sharply over the weekend.China Economyread more
The latest round of tariff announcements in the last few days means that by the end of the year, essentially all Chinese goods exported to the U.S. will be subject to duties.China Economyread more
U.S. stock futures surged Monday morning after President Trump said China is ready to come back to the negotiating table following a phone call Sunday and the two countries...Marketsread more
As Washington and Beijing continue to up the ante in their protracted trade fight, the potential of a recession in the U.S. is now "the biggest concern," according to Standard...US Economyread more
Tensions stemming from the U.S.-China trade war escalated sharply over the last few days, with much happening as Asian markets were shut down for the weekend.China Economyread more
Clouding the G-7 gathering, which represents the world's major industrial economies, are the tit-for-tat tariffs between Washington and Beijing.Politicsread more
Neither the U.S. nor China wants to be seen as the party that derailed trade talks, says William Reinsch of Center for Strategic and International Studies.World Economyread more
China said Friday it will be resuming 25% duties on U.S. autos, and a further 5% on auto parts and components.Asia Marketsread more
World leaders, environmental groups and celebrities have publicly decried the vast swaths of forest being destroyed by the fires.World Newsread more
's monster rally has notched the best two-month start to a year since 1991, but by one simple measure, the market pricing seems to be ignoring the economic reality.
Starting at a few points below 2,800 on Tuesday, the S&P 500 is currently trading at more than 16 times the 2019 earnings estimate for the S&P 500 firms of $172.50. But with all the bearish signs in the market — from slowing global growth to downward earnings revisions to recession fears and the Federal Reserve's tightening possibilities — the stock valuation is looking too high and is assuming the risks would be resolved in a positive way, according to Tom Essaye, founder of Sevens Report Research.
"On a valuation basis this market has risen to reflect a macro environment that is materially more positive than the one we currently have, and as a fundamentals-driven analyst, that makes me nervous over the medium term," Essaye said in a note Tuesday.
"The current macro setup much more matches the 'Scattered Storms' scenario, but the market valuation is reflective of a 'Partly Sunny' environment. That's a discrepancy that will have to close," Essaye pointed out, comparing market multiples to a weather forecast.
The mismatch between fundamental reality and market pricing has had many on Wall Street scratching their heads as stocks' comeback coincided with a wave of downward growth and earnings revisions. The first-quarter earnings growth forecast for the S&P 500 firms has turned negative and consensus first-quarter GDP growth has also been slashed to below 2 percent.
Many have said that what's driving the market is growing optimism about a trade deal with China and the Fed's more "patient" approach to tightening.
"Either markets have to come down to where growth expectations are, or growth and earnings expectations have to move higher to justify current market valuations," Torsten Slok, Deutsche Bank's chief international economist, said in a note last week.
Everything will be OK seems to be the market's mantra for the past few months, but if things don't end up the way the market assumed, the S&P 500 multiple could come down to 15.5 times to 15 times, dragging the S&P 500 down by 5 to 10 percent, Essaye said.