An investing playbook for 2018’s 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 what’s ahead in this year’s second half.

Maybe we’ll 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 latest views as 2018’s 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 company’s strategists have turned more downbeat overall on the world’s 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 (in two parts).

Emerging-markets equities also get a green light, even after a downgrade. They’ve 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 gold’s losing streak may get even worse

Key market gauges

Futures for the Dow












YMU8, +0.33%










 , S&P 500












ESU8, +0.27%










and Nasdaq-100












NQU8, +0.29%










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 year’s 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, +0.82%










is higher, after Asia finished mixed. Oil












CLQ8, -0.19%










and gold 












GCQ8, +0.06%










are slightly higher, as the dollar index












DXY, -0.52%










drops.

The chart

Bitcoin












BTCUSD, -2.71%










today is trading again under $6,000, and that looks like a key technical level, as show in the above Daily Shot chart.

Some traders have suggested big drops are ahead if the cryptocurrency can’t hold above this “critical” round number.

The buzz

Nike’s stock












NKE, +0.49%










looks on track for an up day after the sneakers seller’s better-than-expected results late yesterday, and Corona beer parent Constellation Brands












STZ, +1.27%










is on the earnings docket before the open.

J.P. Morgan












JPM, +1.64%










 , Bank of America












BAC, +1.52%










and other banks announced plans for dividend hikes and stock buybacks following the Federal Reserve’s latest stress tests. Deutsche Bank












DB, +0.87%











DBK, +0.79%










got the cold shoulder, again.

The euro












EURUSD, +0.7175%










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

Check out: MarketWatch’s 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.

Shares in analytics software company Domo












DOMO, +0.00%










are expected to have their trading debut today.

Do you know AMLO? Unorthodox candidate Andrés Manuel López Obrado looks set to become Mexico’s new leader in the country’s presidential election on Sunday.

“The long-term risk for Netflix












NFLX, +1.29%










 , paradoxically, is if today’s dizzying valuation proves not to be too high, but accurate,” says this week’s Economist magazine.

The quote

“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 don’t 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

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 I’ve ever known,” as well as somebody who believed deeply in “the public’s right to know the news.”

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.

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