Hixon Zuercher Capital Management

Fee-only Registered Investment Advisor in Findlay, Ohio 45840

Trade Tensions Linger – Weekly Update for May 28, 2019

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The Week on Wall Street

Stocks drifted lower last week as investors considered the possibility that the world’s two largest economies might take some time to resolve key trade issues.

The S&P 500 retreated 1.17%; the Nasdaq Composite, 2.29%; the Dow Jones Industrial Average, 0.69%. The concern over trade was felt elsewhere: the overseas developed markets benchmark, the MSCI EAFE, also lost 1.41% in five sessions.,

Market Waits for Further Trade Talk Cues

A compromise on tariffs between the U.S. and China did not seem forthcoming last week. Negotiations appeared stalled. Regardless, President Trump and Chinese President Xi are slated to meet at June’s G20 summit in Japan.

The Department of Commerce has effectively banned U.S. companies from doing business with Chinese tech giant Huawei, a major global player in 5G technology. Some analysts think China may respond with retaliatory measures.  

Leading Retailers Report Earnings

Big-box stores and other major retail chains announced first-quarter results last week. While some traditional department store chains disappointed (Kohl’s, JC Penney, Nordstrom), Macy’s recorded its sixth straight quarter of comparable sales growth. Target reported a 10.8% jump in earnings in the first quarter, Walmart announced Q1 gains in earnings and revenue, and Urban Outfitters saw record sales in Q1.,

Final Thought

As new chapters in the U.S.-China trade drama continue to unfold, remember that your investment approach is built around your long-term objectives and risk tolerance. There will always be day-to-day price changes; there will always be breaking news alerts. The disciplined, long-term investor stays the course through the ups and downs.    

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Conference Board’s latest monthly consumer confidence index.
Friday: May consumer spending numbers and May’s final University of Michigan consumer sentiment index (another important measure of consumer confidence levels).

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Wednesday: Dick’s Sporting Goods (DKS), PVH (PVH)
Thursday: Costco (COST), Dell (DELL), Dollar General (DG), Ulta Beauty (ULTA)

 

Major Indices Have a Mixed Week – Weekly Update for May 6, 2019

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The Week on Wall Street

Stocks were up and down last week, and the three major benchmarks ended up little changed after five trading days. The S&P 500 rose 0.20% for the week; the Nasdaq Composite, 0.22%. The Dow Jones Industrial Average declined 0.14%.

The MSCI EAFE index, a benchmark for international stocks, declined 0.21%.

The Fed Emphasizes Patience

The Federal Reserve held interest rates steady at its May meeting. Its May 1 policy statement noted “solid” job growth and economic activity, but only tame inflation pressure.

While the Fed was not expected to make a move, some investors wondered if its latest policy statement might hint at the possibility of a rate cut later this year. No such hint appeared. Fed chair Jerome Powell told the media Wednesday that “we don’t see a strong reason for moving in one direction or the other.”

Indications of a Thriving Economy

Employers added 263,000 net new jobs in April. Economists polled by Bloomberg forecast a gain of 190,000. The jobless rate fell to 3.6% last month, the lowest in half a century.

This better-than-expected employment snapshot comes on the heels of a first-quarter gross domestic product reading that surprised to the upside. In another bit of good news, personal spending rose an impressive 0.9% in March.

Final Thought

On Wednesday and Thursday, stocks fell in the wake of the Fed policy statement. Friday, they more or less recouped their losses after the impressive April jobs report. Ups and downs like these come with the territory when you invest; the key is to stay patient and think long term instead of short term.

THE WEEK AHEAD: KEY ECONOMIC DATA

Friday: The April Consumer Price Index, monitoring monthly and annual inflation.

 

 

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Occidental Petroleum (OXY), Tyson Foods (TSN)

Tuesday: Allergan (AGN), Anheuser-Busch (BUD), Lyft (LYFT)

Wednesday: Green Dot (GDOT), Hostess Brands (TWNK), Walt Disney Co. (DIS)

Thursday: AXA Equitable Holdings (EQH), Keurig Dr. Pepper (KDP), News Corp. (NWSA)

Friday: Enbridge (ENB), Marriott International (MAR), Viacom (VIA)

 

 

 

S&P 500 Reaches a New Peak – Weekly Update for April 29, 2019

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The Week on Wall Street

Stocks returned to record territory, with both the S&P 500 and the Nasdaq Composite closing at historic highs. The S&P gained 1.20% for the week; the Nasdaq, 1.85%. The Dow Jones Industrial Average lagged, losing 0.06%. The MSCI EAFE index of international stocks lost 0.52%.

The S&P took only 17 weeks to fully rebound from its December low.

A Shift in Focus

Last month, Wall Street fixated on trade, reacting to even the slightest hint of progress in U.S.-China negotiations. This month, the trade talks have taken a back seat, and the fixation is on earnings.

Anxieties about a possible earnings recession may be fading. So far, first-quarter results for S&P 500 firms are 5.3% above expectations; that compares to a 5-year average of 4.8%.

At some point, trade talk will come back, or other developments will lead Wall Street to chase other trends. The thing to remember is that Wall Street is fickle: what preoccupies it one week may be shrugged off the next. Short-term trends ultimately amount to background noise during the long-term pursuit of your financial goals.

A Strong First Quarter

Friday, the Bureau of Economic Analysis said that the economy expanded at a 3.2% pace in Q1. The number surprised to the upside. Economists surveyed by Dow Jones estimated Q1 gross domestic product would increase 2.5%.

What’s Ahead

Investors have all kinds of news to consider this week. There will be a plethora of earnings calls, plus important reports on consumer spending and hiring. Also, Federal Reserve chair Jerome Powell will hold a press conference following the central bank’s May meeting.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: March personal spending figures from the Department of Commerce.

Tuesday: The Conference Board’s April consumer confidence index.

Wednesday: The Federal Reserve announces its latest interest rate decision.

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

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Alphabet (GOOGL), Kemper (KMPR)

Tuesday: Amgen (AMGN), Apple (AAPL), Cummins (CMI), McDonalds (MCD)

Wednesday: Allstate (ALL), CVS Health (CVS), Humana (HUM), Public Storage (PSA)

Thursday: CBS (CBS), Cigna (CI), Dunkin’ Brands (DNKN), Gilead Sciences (GILD)

Friday: Fiat Chrysler (FCAU)

 

 

 

 

April 2019 Market Update Video

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The 1st quarter of 2019 is behind us, and major domestic indices have posted a strong performance for the year so far. Questions about the strength of both global and domestic growth contributed to market performance during the month.
 
In this month’s video, I will discuss the major market events from last month, and how they could have an effect on you as an investor.
 
If you have any questions or concerns after watching this video, please reach out to us by sending us an email at hello@hzcapaital.com, or by giving us a call at (419)425-2400. We would love to talk with you.

Special Update: Quarterly Report – Weekly Update for April 8, 2019

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The Week on Wall Street

Stocks just posted their second straight weekly gain. Investors were encouraged by the latest jobs report and new signs of progress on a U.S.-China trade deal. The Dow Jones Industrial Average advanced 1.17% in five trading days; the S&P 500, 1.27%; the Nasdaq Composite, 1.72%. The MSCI EAFE index of international stocks improved 1.84%.

The economy generated 196,000 net new jobs in March, according to the Department of Labor. Monthly job growth averaged 180,000 in the first quarter. Both President Trump and Chinese Vice Premier Liu He told the media last week that the U.S. and China were getting closer to a new trade accord.

Meanwhile, a week into the second quarter, another earnings season is about to unfold. As we await results, we will take a brief look back at what happened in the first quarter.

Quarterly Update

Stocks staged an impressive comeback in Q1, recovering nearly all of the losses incurred in the last three months of 2018.

Bullish Sentiment Increased

Investors were able to set some of their recent concerns aside, at least temporarily. The Federal Reserve indicated that it would pause interest rate hikes, and while no U.S.-China trade deal was completed during the quarter, the ongoing trade dispute cooled. The economy seemed healthy: the jobless rate was under 4%, hourly pay was rising at more than 3% a year, and inflation was tame.

Add in some upside from corporate earnings, and a recipe for gains emerged.

Stocks Had Their Best Quarter Since 2009

The Dow rose 11.15%; the S&P 500, 13.07%; the Nasdaq Composite, 16.49%. Additionally, this was the best first quarter seen on Wall Street since 1998.

The Fed Held Interest Rates Steady

In March, the Federal Reserve left the benchmark interest rate alone and indicated that it would not make a rate hike this year. As recently as December, the Fed had forecast two hikes for 2019.

What’s Ahead

The first-quarter earnings season kicks off this week with three big banks reporting results. The question is whether stocks in the S&P 500 will post earnings that beat analyst expectations to the degree they have in the past few quarters. Other questions: how will consumer confidence, wage growth, and job creation fare in Q2? Will there be a Brexit or a new U.S.-China trade pact this quarter, and if so, how will global markets react? If you have questions of your own as this quarter unfolds, remember that we are always here to talk.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: Minutes from the March Federal Reserve meeting, plus the latest Consumer Price Index, tracking monthly and yearly inflation.

Friday: The initial University of Michigan consumer sentiment index for April, which assesses consumer confidence.

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Wednesday: Bed Bath & Beyond (BBBY), Delta Air Lines (DAL)

Thursday: Fastenal (FAST), Rite Aid (RAD)

Friday: JPMorgan Chase (JPM), PNC (PNC), Wells Fargo (WFC)

 

 

 

 

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