Hixon Zuercher Capital Management

Fee-only Registered Investment Advisor in Findlay, Ohio 45840

Further June Gains – Weekly Update for June 17, 2019

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The Week on Wall Street

Stocks advanced for a second straight week. The S&P 500 benchmark rose 0.47%; the Nasdaq Composite, 0.70%; the Dow Jones Industrial Average, 0.41%. Overseas shares, as tracked by the MSCI EAFE developed markets index, added 0.20%.

The market seemed to put its recent preoccupation with trade issues aside, with attention shifting to this week’s Federal Reserve monetary policy meeting. Traders in futures markets now believe the Fed will make a rate cut in July, so its June policy statement will be of great interest.

Oil Prices Rollercoaster

Attacks on vessels in the Strait of Hormuz, the busy oil shipping channel, helped to push the price of West Texas Intermediate crude 2.2% higher Thursday, just a day after a 4% fall. Even so, WTI crude lost 2.7% in five days, closing Friday at $52.51 on the New York Mercantile Exchange.

Investors wondered at mid-week if tensions in the Persian Gulf region would soon impact oil output and transport. Looking beyond the short term, however, the International Energy Agency reduced its 2020 projection for global oil demand.

Households Bought More in May

Retail sales rose 0.5% last month, according to the Department of Commerce. Across the year ending in May, they advanced 3.2%. The previously announced 0.2% April retreat was revised into a 0.3% gain.

These numbers affirm strong household spending this spring. Consumer spending accounts for roughly two-thirds of the nation’s gross domestic product.

What’s Ahead

In terms of news, Wednesday offers what may prove to be the biggest economic event of the week: a Federal Reserve policy statement and press conference.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The Federal Reserve concludes a 2-day policy meeting, with Fed chair Jerome Powell addressing the media afterward.

Friday: The National Association of Realtors releases data on May existing home sales.

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Jabil (JBL)

Wednesday: Kraft Heinz (KHC), Oracle (ORCL)

Thursday: Kroger (KR), Red Hat (RHT), Darden Restaurants (DRI)

Friday: CarMax (KMX)

 

May Ends with a Retreat – Weekly Update for June 3, 2019

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The Week on Wall Street

Stocks struggled during a 4-day market week as the U.S.-China trade standoff continued to weigh on the minds of market participants. From the Friday, May 24 close to the Friday, May 31 close, the S&P 500 retreated 2.62%; the Nasdaq Composite, 2.41%; the Dow Jones Industrial Average, 3.01%. The MSCI EAFE index of overseas stocks dipped just 1.47% in a week.

Trade is dominating the conversation in the financial markets, with developments steadily unfolding. Wednesday, China’s state media suggested that the country could soon cut off exports of rare earths to the U.S. Late Thursday, the Trump administration announced 5% tariffs on all imports from Mexico, effective June 10; these taxes could rise in the coming months.

Meanwhile, on Main Street…

The Conference Board’s consumer confidence index soared to 134.1 in May, its highest reading since November; the consumer view of present economic conditions was the best since the end of 2000. Additionally, the University of Michigan’s consumer sentiment index ended May at 100.00, near the 15-year peak of 102.4 seen earlier in the month.

Spring also brought a solid advance in consumer spending. April’s gain was 0.3%, according to the Bureau of Economic Analysis.

Final Thought

While Wall Street remains cautious and concerned about trade, consumers appear to be upbeat, sensing widespread economic prosperity. This underscores the fact that the state of the economy does not necessarily correspond to the state of the stock market (and vice versa).

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: The Institute for Supply Management releases its latest factory purchasing manager index, which takes the pulse of the U.S. manufacturing sector.

Tuesday: Federal Reserve Chairman Jerome Powell speaks on monetary policy at the Federal Reserve Bank of Chicago.

Wednesday: Payroll giant ADP releases its May private-sector employment snapshot.

Friday: The Department of Labor presents its May employment report.

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Cracker Barrel Old Country Store (CBRL), Salesforce (CRM)

Thursday: Beyond Meat (BYND), J.M. Smucker (SJM)

 

 

 

Trade News Moves the Market – Weekly Update for May 20, 2019

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The Week on Wall Street

Stocks fell sharply at the start of last week over trade tensions, then recovered with help from strong earnings and indications that U.S.-China trade talks would continue. Even so, the major indices had a down week. The S&P 500 lost 0.76%, while the Nasdaq Composite fell 1.27%, and the Dow Jones Industrial Average declined 0.69%.

In contrast, the MSCI EAFE benchmark for international stocks rose 0.19%.

The Latest Trade Developments

A broad selloff occurred Monday after China announced it would respond to increased U.S. tariffs by boosting its own import taxes on $60 billion of U.S. products. Friday morning, the Street breathed a sigh of relief as the Trump administration decided to delay 25% tariffs planned for imported cars and car parts; they had been slated to take effect on May 18. Just hours later, President Trump announced an end to U.S. tariffs on metals coming from Canada and Mexico.

At midweek, Secretary of the Treasury Steven Mnuchin told reporters that he expected the U.S. to resume trade negotiations with China in “the near future.”

Earnings Season Winds Down

The first-quarter earnings scorecard is nearly complete, as more than 90% of S&P 500 companies have reported actual Q1 results.

Stock market analytics firm FactSet notes that 76% of these firms have beaten consensus earnings-per-share estimates. Overall earnings for S&P 500 components have surpassed expectations by 5.4%. Both these percentages are above 5-year averages.

Final Thought

The market is quite sensitive to trade developments at the moment, and it is unclear whether this will be a short-term trend or a long-term influence on prices. While the U.S. prepares its next moves, China also is preparing its response to any new U.S. tariffs, which could include manipulating its currency.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The April existing home sales report from the National Association of Realtors.

Wednesday: Minutes from the Federal Reserve’s May policy meeting.

Thursday: April new home sales figures from the Census Bureau.

 

 

 

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: AutoZone (AZO), Home Depot (HD), Kohl’s (KSS), Nordstrom (JWN)

Wednesday: Analog Devices (ADI), Lowe’s (LOW), Target (TGT)

Thursday: Best Buy (BBY), Intuit (INTU), TD Bank (TD)

Friday: Foot Locker (FL)

 

 

 

May 2019 Market Update Video

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April was another positive month for the markets. All 3 of the major domestic indices posted gains, while the S&P 500 wrapped up its best 4 months of performance in almost 9 years.

So, what happened last month? We received stronger data updates than many people anticipated – especially for economic growth and corporate earnings. Watch the full video to learn more about the major economic events from the last month, and how they could have an effect on you as an advisor.

If you have any questions or concerns after viewing this video, please give us a call at (419)425-2400, or send us an email at hello@hzcapital.com

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)

 

 

 

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