There was a modest risk-off tone overnight on news that the U.S. has levied additional charges against Huawei and its CFO, including theft of trade secrets and paying bonuses to employees for doing so. The company’s CFO had already been charged with evading sanctions against Iran, and U.S. intelligence officials are expected to cite investments in next generation wireless networks (5G) by Chinese telecom companies as a global threat. Treasury prices were initially higher overnight but have pulled back to essentially unchanged on the day. S&P 500 futures are currently up 4 points. The major focus for this week continues to be the FOMC and U.S./China relations (Huawei and trade negotiations in Washington). The FOMC isn’t expected to make any notable changes to policy or guidance, but market participants will be paying close attention to Fed Chair Powell’s press conference on Wednesday. There has been more discussion of the Fed’s ongoing balance sheet reduction plan in recent weeks, and investors will be listening for any hints from Powell on this topic. 

Jason Haley
Managing Director, Investment Management Group