An investing playbook for 2018s 2nd half with how U.S. stocks stand apart


The dogged Dow is trying to end its rocky week on an upbeat note, as everyone wonders whats ahead in this years second half.

Maybe well see LeBron become a Laker, England win the World Cup and some fresh market driver displace trade-war fears.

For investors, global stocks are now not looking as great as earlier this year, say Schroders strategists for our call of the day.

We have downgraded equities to neutral, reflecting our more cautious stance, they write in a note giving their latest take on a range of assets. Positive earnings revisions have become less widespread recently, and a number of upcoming political events could lead to heightened risk aversion.


The graphic below shows their views as 2018s second half looms. Global stocks have been cut to a meh rating, government bonds and credit draw neutral-to-negative scores, and commodities get a positive-to-neutral rating. The Schroders team likes oil, industrial metals and agricultural commodities in particular, but not gold.


While the British companys strategists have turned more downbeat overall on the worlds stock markets, they think American equities stand out.

The U.S. continues to be the most resilient economy and the source of many upward earnings revisions, they write, offering the graphic below.


Emerging-markets equities also get a green light, even after a downgrade. Theyve got their problems, but valuations are relatively attractive, the strategists say.

Read more: 3 charts show why emerging-market stocks are getting crushed

And see: Why golds losing streak may get even worse

REMINDER:
July 4th is on a Wednesday this year, so it's technically gonna be a 9-day weekend.

— Ivan the K (@IvanTheK) June 28, 2018

Key market gauges

Futures for the Dow
YMU8, +0.43%
, S&P 500
ESU8, +0.33%
and Nasdaq-100
NQU8, +0.40%
are higher, after the Dow
DJIA, +0.41%
, S&P
SPX, +0.62%
and Nasdaq Composite
COMP, +0.79%
all rallied yesterday, but stayed on track for weekly losses.


With one session left in this years first half, the Dow is down 2% for the period, while the S&P and Naz are up about 2% and 9%, respectively.

Europe
SXXP, +0.88%
is gaining, after Asia finished mixed. Oil
CLQ8, +0.03%
and gold
GCQ8, +0.14%
are up slightly, as the dollar index
DXY, -0.54%
drops.


See the Market Snapshot column for the latest action.

The chart
Bitcoin is back below the $6K mark.


Bitcoin
BTCUSD, -2.98%
today is trading again under $6,000, as shown in the above Daily Shot chart.

Some traders have suggested big drops are ahead if the cryptocurrency cant hold above this key round number.


The buzz

Nikes stock
NKE, +0.49%
looks on track to boost the Dow after the sneakers sellers better-than-expected results, while Corona beer distributor Constellation Brands
STZ, +1.27%
is falling premarket after its report.


J.P. Morgan
JPM, +1.64%
, Bank of America
BAC, +1.52%
and other big lenders announced plans for dividend hikes and stock buybacks following the Federal Reserves latest stress tests. Deutsche Bank
DB, +0.87%
DBK, +0.91%
got the cold shoulder, again.


The euro
EURUSD, +0.6570%
is jumping after the European Union reached a deal on migration, removing some political risk that has been hanging over the shared currency.

On the data front, the Feds preferred inflation gauge has hit the central banks long-run target of 2% for the first time since 2012. After the opening bell, watch for readings on the Chicago PMI and consumer sentiment.


Check out: MarketWatchs Economic Calendar

In White House news, John Kelly is reportedly expected to leave his chief-of-staff gig this summer, after a year on the job, and China has been further easing curbs on foreign investment.

Shares in analytics software company Domo
DOMO, +0.00%
are slated to have their trading debut today.


Do you know AMLO? Unorthodox candidate Andr茅s Manuel L贸pez Obrado looks set to become Mexicos new leader in the countrys presidential election on Sunday.

The long-term risk for Netflix
NFLX, +1.29%
, paradoxically, is if todays dizzying valuation proves not to be too high, but accurate, says this weeks Economist magazine.


Netflix makes it to the cover of the Economist: pic.twitter.com/XcIIXc0DB9

— LST (@LongShortTrader) June 28, 2018
The quote
AFP/Getty Images Police respond to the shooting Thursday in Annapolis.


People in there were just trying to do a job for the public. Something like this might happen in Afghanistan or Iraq or something like that, but you dont expect it to happen in a little sleepy office across from the local mall. Capital Gazette reporter E.B. Pat Furgurson gives his reaction to the shooting at his newspaper in Annapolis, Md., that left five dead.

See: Suspect in targeted Maryland shooting said to have vendetta against paper

And read: Paper publishes edition hours after deadly newsroom shooting

Yes, were putting out a damn paper tomorrow. t.co/ScNvIK1A4R


— Capital Gazette (@capgaznews) June 29, 2018

Author Carl Hiaasen, known for his humorous crime fiction, paid tribute to his brother Rob, one of the slain journalists, calling him one of the most gentle and funny people Ive ever known, as well as somebody who believed deeply in the publics right to know the news.

Opinion: The next battleground in the gun debate may be taxes

And see: Buffett offers a simple explanation why Berkshire invests in gun stocks

Random reads

Did you hear about the rapper who snarled LA traffic for hours?


Guardian investigation: Women in U.S. prisons recruited by sex traffickers.

Facebook
FB, +0.20%
tests plane-mounted lasers that deliver high-speed internet.

RIP to science-fiction legend Harlan Ellison, who has died at age 84.


Heres an explainer on unlimited data plans:

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Or Follow MarketWatch on Twitter or Facebook.

And sign up here to get the Friday email highlighting 10 of the best MarketWatch articles of the week.

Victor Reklaitis


Victor Reklaitis is a London-based markets writer for MarketWatch. Follow him on Twitter @VicRek.

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Quote References YMU8 +105.00 +0.43% ESU8 +9.00 +0.33% NQU8 +28.00 +0.40% DJIA +98.46 +0.41% SPX +16.68 +0.62% COMP +58.60 +0.79% SXXP +3.31 +0.88% CLQ8 +0.02 +0.03% GCQ8 +1.70 +0.14% DXY -0.52 -0.54% BTCUSD -179.89 -2.98% NKE +0.35 +0.49% STZ +2.92 +1.27% JPM +1.69 +1.64% BAC +0.43 +1.52% DB +0.09 +0.87% DBK +0.08 +0.91% EURUSD +0.0076 +0.6570% DOMO +0.00 +0.00% NFLX +5.03 +1.29% FB +0.39 +0.20% Show all references
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E-Mini Dow Sep 2018 U.S.: CBOT: YMU8 $24,325.00 +105.00 (+0.43%)

Volume 55221
Open $24,247
High $24,408
Low $24,207
P/E Ratio 0
Div Yield 0
Market Cap N/A

E-Mini S&P 500 Future Sep 2018 U.S.: CME: ESU8 2,728.50 +9.00 (+0.33%)

Volume 251.0K
Open 2,720
High 2,737
Low 2,717
P/E Ratio 0
Div Yield 0
Market Cap N/A

E-Mini Nasdaq 100 Index Sep 2018 U.S.: CME: NQU8 7,088.50 +28.00 (+0.40%)

Volume 83776
Open 7,055
High 7,114
Low 7,045
P/E Ratio 0
Div Yield 0
Market Cap N/A

Dow Jones Industrial Average DJ-Index: DJIA 24,216.05 +98.46 (+0.41%)

Volume 305.0M
Open 24,064
High 24,308
Low 23,997
P/E Ratio 0
Div Yield 0
Market Cap N/A

S&P 500 Index S&P Base CME: SPX 2,716.31 +16.68 (+0.62%)

Volume 2.1B
Open 2,699
High 2,724
Low 2,692
P/E Ratio 0
Div Yield 0
Market Cap N/A

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