WHAT HAPPENED THIS WEEK?

⚡️ Fast Facts ⚡️

🚔 Walmart Inc. (WMT +0.77%) agreed to pay $282 million to resolve years-long criminal and regulatory investigations into whether it paid bribes around the world, agreeing that it had lax policies in place to catch potential corruption.

📈 The Dow Jones Industrial Average briefly charted near record territory on Friday before turning negative in the last half-hour of trading. For the week, all three major U.S. stock indexes gained at least 2.2%, with the S&P 500 hitting its first record close since April. Bond prices rose, pushing 10-year Treasury yields down to 2% for the first time since 2016.

🍎 Apple Inc. (AAPL -0.34%) is asking suppliers to study shifting final assembly of some products out of China, people familiar with the matter said, as trade tensions prompt the company to consider diversifying its supply chain.

☎️ Slack Technologies Inc. (WORK) surged in its trading debut on the New York Stock Exchange,the latest technology firm to jump into a hot initial-public-offering market.

😴 The Federal Reserve on Wednesday raised concerns the economy is slowing and sent its strongest signal to date that it could act soon to cut interest rates, a move that would plunge the central bank into unusual territory.

💸 Cryptocurrency firms will be subjected to rules to prevent the abuse of digital coins such as bitcoin for money laundering, a global watchdog said on Friday, the first worldwide regulatory attempt to constrain the rapidly growing sector.

⚠️  Lower Rates… Why? 

The Federal Reserve on Wednesday raised concerns the economy is slowing and sent its strongest signal to date that it could act soon to cut interest rates, a move that would plunge the central bank into unusual territory.

Business investment is slowing, uncertainty has increased and the U.S. economy is growing at a “moderate” pace, the Fed said Wednesday in its official policy statement, a notable downgrade from last month, when the central bank characterized the economy as “solid.”

The Fed did not cut rates Wednesday and did not specify exactly when it would. But nearly half of Fed leaders now predict rates will fall by the end of the year, a significant change from March, when none of the 17 Fed policymakers anticipated a cut this year. Seven of the 17 are forecasting two rate decreases by the end of 2019, according to projections also released Wednesday.

The Fed’s benchmark interest rates play a powerful role in shaping the economy, by encouraging or discouraging the lending that often serves as the lifeblood of business. Mortgages, credit cards, business loans and virtually all other types of lending are affected by the Fed’s decisions.

The Fed is facing an unusual predicament. By many measures, the economy is doing well, with unemployment and inflation low, so it should not need stimulus from low rates. But there have been numerous red flags signaling a shift in the economy, particularly in manufacturing data, and the Fed is in the uncomfortable spot of trying to figure out whether the head winds are strong enough to necessitate action.

Up, Up, and Away!! 🎈🎈

For the week, all three major U.S. stock indexes gained at least 2.2%, with the S&P 500 hitting its first record close since April. Bond prices rose, pushing 10-year Treasury yields down to 2% for the first time since 2016.

Along with stocks and bond prices rising, the price of oil jumped in recent trading sessions. With the Central banks surprising Wall Street by keeping rates flat, coupled with enthusiasm around a Trump and China meeting, momentum was created.

The Dow industrials rose 2.4% this week and are on pace for their best month in years. The gains come as investors are delicately balancing indications that trade disputes may lead to slower economic growth around the world with optimism that President Trump will move closer to a China trade deal in meetings at the G-20 summit.

The investors are also considering the possibility that central banks will step in and cut rates if economies do falter, which may temporarily raise markets, even as investors begin to recognize that we’re nearing the end of the current economic cycle.