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Mar 13, 2018


The Wall Street Journal

Investors Are Betting on U.S. Stocks Again 


By Ben Eisen
Morning MoneyBeat is the Journal’s pre-market primer. To receive the newsletter via email, click here.

Market Snap at 03/13/2018 08:50:53 AM ET
S&P 500 Futures 0.34%
DJIA Futures 0.32%
U.S. 10 Year 7/32
WSJ Dollar Index 0.02%
Crude Oil -0.78%
Gold -0.3%

FTSE 100 -0.42%
Nikkei 225 0.66%
DAX -0.16%
Hang Seng 0.02%
CAC 40 0.19%
Shanghai -0.49%

Overnight Developments

  • U.S. futures pointed to opening gains after fresh inflation data matched expectations, with slowing price increases in February from the prior month. S&P 500 futures were recently up by 0.5%.
  • The Stoxx Europe 600 fell 0.1% in midday trade.
  • Earlier, Asian markets mostly logged gains.
  • The Breakfast Briefing

    The U.S. is once again on top.
    Major stateside stock benchmarks are pacing for a better annual performance than much of the rest of the world, despite a volatile few weeks. The S&P 500 is up 4.1% so far this year.
    By contrast, the MSCI ACWI ex-USA Index, which tracks non-U.S. companies across developed and emerging markets, has risen just 1.2%. The Nikkei 225 is down 4.1% through Monday, while the Shanghai Composite is up just 0.6%. The Stoxx Europe 600 is down 2.6%, and the FTSE 100 has slumped 6.2%.
    It's still early in a year that has already provided many surprises, so the relative performances could, of course, flip. But if the U.S. manages to finish 2018 on top, it would mark a return to the order that's characterized much of the post-crisis period. Last year, the MSCI index climbed 24%, topping the S&P 500's 19% rise for the first time since 2012.
    In 2017, investors piled into international equities, making bets on resurgent growth. But for all the signs that the global economy has been emerging from a period of sluggish expansion, the U.S. still appears to be a top choice among investors. That's due in part to a not-too-hot, not-too-cold expansion that has boosted corporate profits while containing fears about runaway inflation.
    "Extraordinarily strong earnings momentum, corporate tax cuts and fiscal stimulus underpin our positive view" on U.S. stocks, said Richard Turnill, BlackRock’s global chief investment strategist, in a market commentary on Monday.
    To be sure, investors have grown concerned about high valuations of U.S. stocks after nine years of a bull market run. But recent volatility, which pushed major indexes to their first 10% drop in two years, helped alleviate concerns that prices were rising too fast relative to earnings.
    For now, it seems the U.S. stock market is the one to beat.
    Do you favor stocks inside or outside the U.S.? Let the author know your thoughts at

    Key Events

    8:30 a.m.: Consumer Price Index for February [Prior: 0.5%; Consensus: 0.2%; Actual: 0.2%]
    U.S. consumer prices rose moderately in February, although at a slightly slower pace than in the prior month. The consumer-price index, which measures what Americans pay for everything from shampoo to hotel stays, rose 0.2% in February after rising a seasonally adjusted 0.5% in January.

    Stocks to Watch

    Wynn Resorts—Down 0.4%: The casino operator dropped litigation against its former largest shareholder, Japanese pachinko mogul Kazuo Okada, according to a court order signed by the judge in the case and viewed by The Wall Street Journal.
    Stitch Fix—Down 8.6%: The personal shopping service said net revenue increased 24% in the most recent quarter from a year earlier, topping expectations, though its cost of sales increased 29%.
    Lattice Semiconductor—Up 0.5%: Lattice said Chief Executive Officer Darin Billerbeck is retiring, effective March Friday. The board has named Chief Operating Officer Glen Hawk interim CEO while it searches for a permanent successor.
    Tilly's—Down 14.5%: The retailer reported that revenue grew less than expected in the most recent quarter and said same-store sales were flat.

    Number of the Day

    At least six U.S. trading venues have jumped into cryptocurrency derivatives in recent months, including New York-based trueEX LLC, which announced plans to offer such products on Monday.

    Must Reads

    Bid for Qualcomm Blocked by Trump on Security Concerns President Trump blocked Broadcom’s $117 billion hostile offer for Qualcomm over national-security concerns, quashing what would have been the biggest-ever tech deal. 
    GE’s Top Executives Miss Out on Cash Bonuses for the First Time General Electric didn’t pay a cash bonus last year to its top executives at corporate headquarters, which it said was the first time in the company’s 125-year history.
    Goldman Sachs Puts David Solomon in Line to Be Next CEO: Solomon’s status rises at firm after fellow president, Harvey Schwartz, announces plans to retire in April.
    Is Time Running Out for the Swiss Watch Industry?: With sales flagging, Switzerland’s watchmakers need to raise the interest of a generation that has no need for traditional timepieces.
    Stormy Daniels Offers to Repay $130,000 to Trump: She would give back the money if she is released from contract barring her from taking about alleged sexual encounter with the president, attorney’s letter says.
    Dropbox Sets IPO Target Valuation at $7 Billion to $8 Billion: Web-storage company said it expects its shares to price between $16 and $18

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