On this morning’s show, Karl discussed the weekend trade truce between President’s Xi & Trump and the impact on the stock market. No new tariffs…for now.
Trey Ware: Well, the Dow has just celebrated the best June in 81 years, the S&P the best in 64 years, and US oil production hits 12 million barrels a day for the first time. Shell production in the Permian Basin out in West Texas recently experienced a boom, causing US production of oil to overtake that of Saudi Arabia and Russia. On the Stephens Roofing Newsmaker Hotline every Monday at this time it’s Karl Eggerss, from Covenant, and he’s joining us here to talk about this and so much more when it comes to the economy. Good news concerning the Dow and the S&P, huh?
Karl Eggerss: Yeah. It’s a good lesson for investors that, you know, we get a lot of news events everyday, and a lot of tweets and everything else, and here we are at all-time highs and, you know, bottom line is we’re sitting here with very low interest rates. We’re sitting here with pretty good corporate profits. An economy that we would say good but not great. And you may disagree with that, I think it’s just slowing a bit, but all in all a pretty Goldilocks scenario.
Now, you get over the weekend, of course, this truce on the Trump tariff and trade war that’s been going on. So, we’ll probably see a higher market today. Kind of the next catalyst, or the next thing we need to look at, is we do have corporate profits coming out in a few weeks, we also have, you know, the Federal Reserve next month. They’re pretty much pinned in a corner now. They’re going to have to cut interest rates because that’s what everybody’s expecting. If they don’t do that, we could see a sell-off or we may see a sell-off just because all the good news is kind of baked in right now.
Trey Ware: Yeah, trying to take some profits, but when you look at this, if they come down on … even if they ease back a quarter or even less than that, but usually about a quarter, if they ease back that much next week and then the President gets something done with China in the next, you know, couple of weeks or whatever, he’s going to have a snowball, a big run going into next year.
Karl Eggerss: Oh, there’s no doubt about it. But also think about this, Trey, just because the Federal Reserve hasn’t officially cut rates yet, the bond market has already anticipated this. The interest rates have been falling. Mortgage rates have fallen a lot lately, so that’s going to provide a nice little tailwind, in the next few weeks, for the economy, I think. We were seeing oil prices kind of easing up a bit. They’re back over 60 this morning. But generally speaking, we’re seeing some of these things, like interest rates, which was a big impact on the economy and our listeners.
Trey Ware: Yeah. Yeah. Very cool. Also that we’re now one of the largest producers right here in Texas in the entire world. Thank you, Karl. Karl Eggerss is with us every Monday at this time with Covenant to talk about what’s going on with the stock market and our economy.