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Major Indices Move Lower – Weekly Update for November 25, 2019

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The Week on Wall Street

Stocks declined last week as mixed signals emerged about the progress of U.S.-China trade negotiations.

The three major Wall Street benchmarks all took weekly losses. The Dow Jones Industrial Average declined 0.46%; the S&P 500, 0.33%, the Nasdaq Composite, 0.25%. Also pulling back, the MSCI EAFE index, tracking developed stock markets outside the U.S. and Canada, retreated 0.69%.

Nothing Conclusive Regarding Trade

As the market week ended, there was still haziness surrounding the state of U.S.-China trade discussions. Were negotiators on the cusp of a phase-one deal or further away?

Friday, President Trump told reporters that a deal was “very close,” but Chinese President Xi Jinping said that his country could decide to “fight back” against certain terms. Last week, a bill intended to support Hong Kong protesters advanced through Congress, and that development was not taken well in Beijing.

The Fed Assesses the Economy

Federal Reserve officials gathered for their October meeting “generally saw the economic outlook as positive” according to minutes from the central bank’s October monetary policy meeting released Wednesday. Some of them termed the economy “resilient.”

The minutes also noted that the Fed would wait to assess the impact of its recent interest rate cuts and that any upcoming policy decisions might be data dependent.

Strength in the Housing Sector

Existing home sales improved 1.9% last month, by the estimation of the National Association of Realtors. Year-over-year, sales were up 4.6% through October, and the median sale price was $270,900, 6.2% above where it was 12 months earlier.

Wednesday, the Census Bureau said that single-family home construction increased for a fifth straight month in October. In addition, the pace of building permits for new homes hit a level unseen since 2007.

What’s Ahead

This will be an abbreviated trading week on Wall Street. U.S. stock and bond markets are closed on Thanksgiving Day (Thursday), and then reopen for a half-day session on Friday.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Census Bureau issues its latest new home sales snapshot, and the Conference Board releases its November Consumer Confidence Index.

Wednesday: October consumer spending numbers appear from the Department of Commerce, and the Bureau of Economic Analysis publishes a new estimate of third-quarter economic expansion.

Source: Econoday, November 22, 2019

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Agilent (A), Hewlett-Packard (HPE), Palo Alto Networks (PANW)

Tuesday: Analog Devices (ADI), Dell Technologies (DELL), Vmware (VMW)

Wednesday: Deere & Co. (DE)

Source: Zacks, November 22, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

S&P 500 Nearly Makes History – Weekly Update for October 28, 2019

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The Week on Wall Street

The S&P 500 came within 0.1% of a record close Friday. Stocks were lifted last week by positive news on U.S.-China trade negotiations, plus earnings announcements.

The Nasdaq Composite posted the largest weekly gain of the three major U.S. stock indices. It rose 1.90%. Last week also brought gains of 0.70% for the Dow Jones Industrial Average and 1.22% for the S&P. The MSCI EAFE, a benchmark for developed stock markets outside the U.S., rose 1.14%.

Another Hint of Progress in Trade Talks

Friday, the Office of the U.S. Trade Representative stated that parts of a new trade deal with China were near completion. No specifics were given as of Friday’s close, but the USTR noted that negotiators had “made headway” on key issues.

Analysts think both sides may cancel certain tariffs as part of a deal. President Trump has said that he would like to sign a new trade accord with China’s President, Xi Jinping, next month.

A Gain for Consumer Sentiment

Rising to a final October mark of 95.5, the University of Michigan’s Consumer Sentiment Index advanced 2.3 points month-over-month. During August and September, the index’s level varied from 89.8 to 93.2.

What’s Next

The Federal Reserve meets this week. Will it make another interest rate cut? And if it does, could that be the last rate cut for a while? Traders will study the language of the statement and listen carefully to Fed chair Jerome Powell’s Wednesday press conference for clues.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Conference Board presents its October Consumer Confidence Index.

Wednesday: The Federal Reserve makes its latest statement on monetary policy, and Automatic Data Processing (ADP) publishes its October private-sector payrolls report.

Thursday: The Department of Commerce offers September consumer spending data.

Friday: November begins with the Department of Labor’s October jobs report and the Institute for Supply Management’s newest Purchasing Managers Index for the factory sector, a gauge of U.S. manufacturing activity.

Source: Econoday, October 25, 2019

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: AT&T (T), Alphabet (GOOG), HSBC (HSBC)

Tuesday: Amgen (AMGN), BP (BP), Mastercard (MA), Merck (MRK), Pfizer (PFE)

Wednesday: Apple (AAPL), Facebook (FB), GlaxoSmithKline (GSK), Starbucks (SBUX)

Thursday: Altria (MO), Bristol-Myers Squibb (BMY), Sanofi (SNY)

Friday: AbbVie (ABBV), Alibaba (BABA), Berkshire Hathaway (BRK.B), Chevron (CVX), ExxonMobil (XOM)

Source: Zacks, October 25, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

S&P & Nasdaq Outgain Dow – Weekly Update for July 29, 2019

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The Week on Wall Street

Last week, investors assessed earnings and the initial estimate of second-quarter economic growth, while awaiting the Federal Reserve’s next announcement about interest rates.

Stocks rose for the week; particularly, tech shares. The S&P 500 gained 1.65%; the Nasdaq Composite, 2.26%. The Dow Jones Industrial Average lagged, adding just 0.14%. MSCI’s EAFE index, a gauge of equity performance in developed foreign markets, ticked up 0.01%.

Economy Grew Moderately in Q2

Analysts surveyed by Dow Jones Newswires had forecast 2.0% Gross Domestic Product (GDP) for the second quarter. The actual estimate, announced Friday by the Bureau of Economic Analysis, was slightly better at 2.1%.

While this is the poorest quarterly GDP number since the opening quarter of 2017, the decline in GDP largely reflects a decrease in business investment. Consumer spending improved 4.3% in Q2, and government spending rose 5.0%, which was the biggest quarterly gain in a decade.

China Trade Talks to Restart

U.S. trade delegates are scheduled to resume face-to-face negotiations with their Chinese counterparts, starting Tuesday in Shanghai.

This renewed effort to forge a bilateral trade pact could go on for some time. Secretary of the Treasury Steven Mnuchin, who is part of the U.S. delegation, told reporters last week that it would likely take “a few more meetings” before any kind of accord can be considered.

What’s Next

Wednesday at about 2:00pm EST, the Federal Reserve is scheduled to conclude its July meeting. Wall Street is eager to see what the Fed will do with interest rates. The question is whether traders have priced in expectations of a cut and how they may react if no cut comes.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The federal government’s June personal spending report and the Conference Board’s monthly index of consumer confidence.

Wednesday: The Federal Reserve presents its latest statement on interest rates and monetary policy, and payroll titan ADP offers its July private-sector employment snapshot.

Thursday: The latest report on American manufacturing from the Institute for Supply Management.

Friday: July jobs data from the Department of Labor, and the University of Michigan’s final July Consumer Sentiment Index, measuring household confidence in the economy.

Source: Econoday / MarketWatch Calendar, July 26, 2019

The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: RingCentral (RNG)

Tuesday: Apple (APPL), Mastercard (MA), Merck (MRK), Pfizer (PFE), Procter & Gamble (PG)

Wednesday: General Electric (GE), Qualcomm (QCOM)

Thursday: Royal Dutch Shell (RDS.A), Verizon (VZ)

Friday: Berkshire Hathaway (BRK.B), Chevron (CVX), ExxonMobil (XOM), Toyota (TM)

Source: Zacks, July 26, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

S&P 500 Tops 3,000 – Weekly Update for July 15, 2019

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The Week on Wall Street

Friday, the S&P 500 settled above 3,000 for the first time, after rising 0.78% for the week. The Dow Jones Industrial Average chalked up a milestone of its own: the blue chips ended the week above 27,000, gaining 1.52% on the way. Additionally, the Nasdaq Composite wrapped up the week 1.01% higher. The MSCI EAFE index, a gauge of overseas developed markets, fell 0.65%.

Stocks rallied at midweek with help from Federal Reserve Chairman Jerome Powell’s congressional testimony on monetary policy, plus the latest Fed meeting minutes.

Jerome Powell’s Statements

Wednesday, Chairman Powell told Capitol Hill lawmakers that “uncertainties around global growth and trade continue to weigh on the outlook” of the Federal Open Market Committee. He also noted that “manufacturing, trade, and investment are weak all around the world.”

On the same day, the Fed presented the minutes of its June policy meeting. The record shared the belief of some Fed officials that “a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy.”

Overall Inflation Remains Muted

The June Consumer Price Index, released last week by the Bureau of Labor Statistics, measured only 1.6% yearly inflation. The Federal Reserve uses the Bureau of Economic Analysis’ Core Personal Consumption Expenditures (PCE) Price Index as its inflation barometer; in its latest edition, it showed just a 1.5% year-over-year rise.

Currently, the Fed has a yearly inflation target of 2.0%. In the past, it has often raised interest rates in response to increasing inflation, which can potentially slow growth and affect hiring and employment levels. Absent significant inflation pressure, such a response may not be forthcoming.

Final Thought

All eyes are on corporate earnings this week, as prominent banks and about two dozen other S&P 500 firms report second-quarter results. Market participants have much to consider in terms of profits, revenue, and guidance.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Fed chair Jerome Powell delivers a speech on monetary policy at the G7 summit in France, and the Census Bureau releases its June retail sales report.

Friday: The University of Michigan presents its preliminary July consumer sentiment index, measuring consumer confidence and perceptions of the economy.

 

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Citigroup (C), J.B. Hunt (JBHT)

Tuesday: Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Wells Fargo (WFC)

Wednesday: Bank of America (BAC), Netflix (NFLX), Novartis (NVS), Abbott Labs (ABT)

Thursday: Microsoft (MSFT), UnitedHealth (UNH)

Friday: American Express (AXP)

 

 

 

Down Week Ends Strong Month – Weekly Update for July 1, 2019

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The Week on Wall Street

A month of gains for stocks ended with a weekly retreat. The S&P 500 lost 0.30%; the Nasdaq Composite, 0.32%; the Dow Jones Industrial Average, 0.45%. In contrast, overseas shares, tracked by the MSCI EAFE index, advanced 0.14%.

Last month was the best June for the blue chips since 1938; the best month for the S&P, since 1955. The Dow gained 6.9% in June, the S&P 6.2%.

Trade Talks Could Soon Restart

All week, investors had one eye on Saturday’s Group of 20 summit in Japan, where President Trump and Chinese President Xi Jinping were slated to meet. This weekend, President Trump announced that he and President Xi had agreed to a resumption of trade talks between the U.S. and China. As part of that agreement, the U.S. is holding off on placing tariffs on an additional $300 billion of Chinese goods.

While trade tensions certainly remain between both countries, the news that formal discussions could resume may renew investor optimism about progress toward a trade pact.

Powell Cautions Against Adjusting Rates Too Quickly

In the meantime, Federal Reserve Chairman Jerome Powell attracted attention with new remarks on monetary policy. Powell stated last week that the Fed officials were “mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment.”

While many traders think the central bank will lower the benchmark interest rate at its July meeting, Powell noted that there was not yet consensus for a cut among Fed policymakers.

What’s Ahead

This will be a holiday-shortened trading week. The New York Stock Exchange will close early Wednesday, and all U.S. financial markets will close Thursday for the July 4 holiday. Markets reopen on Friday.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: The Institute for Supply Management’s latest purchasing manager index for the factory sector, considered the main barometer of the state of U.S. manufacturing.

Wednesday: Payroll giant ADP’s private-sector employment report for June.

Friday: The June jobs report from the Department of Labor.

 

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

No major earnings reports are scheduled for this week.

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