Outlook for May 2019

It’s earnings season amid record low volatility — which is turning out to be interesting to watch.

Companies are clearing the low set thresholds easily with comparable or declining revenues and high earnings thanks to the record buybacks. For instance, Apple’s latest quarterly result show very similar numbers as they were four years ago, but trading at high price thanks to the reduction in share count.

On the central banks front, non-US central bankers are caving to the reality. From the Canadian CB to a handful of European CBs, all have changed their tones and dropped the rate hike bias completely — and already discussing rate cuts. This week’s communication from the Fed also confirms that rate hikes for this cycle are over.

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