Hixon Zuercher Capital Management

Fee-only Registered Investment Advisor in Findlay, Ohio 45840

Phase-One Trade Deal Reached – Weekly Update for December 16, 2019

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The Week on Wall Street

The U.S. and China announced a limited trade agreement last week. That news lifted U.S. and foreign stocks, leading to weekly gains.

Advancing 0.91% on the week, the Nasdaq Composite outperformed the S&P 500 (up 0.73%) and Dow Jones Industrial Average (up 0.43%). The MSCI EAFE index, measuring the performance of developed markets overseas, improved 0.42%.

Phase-One Trade Deal Reached, December Tariffs Averted

Friday, White House and Chinese officials confirmed an agreement on what has been characterized as an initial step toward a larger trade pact. As a result of this phase-one deal, new U.S. tariffs (slated to go into effect on December 15) were canceled. The 15% tariffs (imposed on $110 billion of Chinese goods in September) now fall to 7.5%.

In return, China commits to buy greater quantities of American crops, factory goods, and energy products.

Fed Holds Steady on Short-Term Interest Rates

The last Federal Reserve meeting of the year brought no adjustment for the federal funds rate. The vote to leave short-term rates unchanged was unanimous.

After the meeting, Fed chair Jerome Powell told the media, “as long as incoming information about the economy remains broadly consistent with [our] outlook, the current stance of monetary policy will likely remain appropriate.”

Retail Sales Disappoint

Economists, surveyed by Bloomberg, expected a retail sales gain of 0.5% for November, but according to the Department of Commerce, the advance was only 0.2%. In a bright spot for analysts who wanted to see a strong start to the holiday shopping season, sales at online retailers rose 0.8% last month.

Note: There will be no Weekly Market Update next week, but we will be back on December 30 with a special “Year-in-Review” edition of the WMU. Have a happy holiday season!

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Census Bureau offers a snapshot of November residential construction activity.

Thursday: A look at November existing home sales from the National Association of Realtors.

Friday: November personal spending data and the third estimate of third-quarter economic expansion from the federal government, plus the year’s final University of Michigan Consumer Sentiment Index (which measures consumer confidence levels).

Source: Econoday, December 13, 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

Tuesday: FedEx (FDX)

Wednesday: General Mills (GIS), Micron Technologies (MU), Paychex (PAYX)

Thursday: Accenture (ACN), Nike (NKE)

Friday: CarMax (KMX)

Source: Zacks, December 13, 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.

Stocks Ride Out a Choppy Week – Weekly Update for December 9, 2019

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The Week on Wall Street

Key Wall Street benchmarks were up and down last week – or rather down and then up. A Tuesday retreat was offset by a Friday rally spurred by the Department of Labor’s November jobs report.

While the S&P 500 managed to rise 0.16% for the week, the Dow Jones Industrial Average declined 0.13%, and the Nasdaq Composite ceded 0.10%. MSCI’s EAFE benchmark for international stocks retreated 0.25%.

Hiring Surpasses Expectations

Employers added 266,000 net new jobs last month, 79,000 more than economists surveyed by Dow Jones had projected. The main jobless rate ticked down 0.1% to 3.5%. The U-6 rate, counting both the unemployed and underemployed, also declined 0.1% to 6.9%. Wages grew 3.1% year-over-year, above the 3.0% Dow Jones estimate.

These numbers do not indicate an economy cooling off. While they were influenced by the return of striking General Motors workers to their jobs, November hiring gains were spread across several categories.

Markets Might Wait Well into 2020 for a China Trade Deal

The U.S.-China trade dispute has gone on for 21 months. Wall Street would like to see a new phase-one trade agreement signed this month, but the timeline could lengthen. On Tuesday, President Trump said that he was considering the option of waiting until after the 2020 election to sign off on such a pact.

On December 15, the U.S. is slated to impose a new set of tariffs on around $160 billion of Chinese products. Tech companies are eyeing this date with concern.

Final Thought

Holiday shopping is critical to the economy, accounting for about 20% of annual retail sales. This year’s calendar, however, does not favor retailers. The 2019 holiday shopping season is six days shorter than last year’s, as Thanksgiving fell on November 28. So, expect traders to keep close tabs on the pace of holiday spending, even with consumer confidence indices and stock benchmarks at high levels.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The Federal Reserve makes its latest monetary policy statement, followed by a press conference featuring Fed Chairman Jerome Powell; also, the November Consumer Price Index appears.

Thursday: The Department of Commerce releases its November retail sales report.

Source: Econoday, December 6, 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

Tuesday: AutoZone (AZO)

Wednesday: Lululemon Athletica (LULU)

Thursday: Adobe Systems (ADBE), Broadcom (AVGO), Costco (COST)  

Source: Zacks, December 6, 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.

November Concludes With Gains – Weekly Update for December 2, 2019

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The Week on Wall Street

As November wrapped up, U.S. equity benchmarks advanced. Stocks were again aided by a sense of optimism that a preliminary U.S.-China trade deal could be near.

For the week, the Nasdaq Composite added 1.87%; the S&P 500, 1.21%; the Dow Jones Industrial Average, 1.03%. The MSCI EAFE index, which measures the performance of developed stock markets outside North America, gained 0.89%.

Markets Wait for News of a Trade Pact

Wednesday, a senior White House official told Politico that the U.S. was “millimeters away” from a phase-one trade agreement with China, a deal that might involve the removal of certain tariffs.

Still, friction remains within the Sino-American relationship. Last week, President Trump signed two bills into law backing pro-democracy demonstrators in Hong Kong. China’s Ministry of Foreign Affairs quickly reacted, stating that American lawmakers had “sinister intentions” and adding that China would take “strong counter-measures” in return.

The Latest on Consumer Spending and Consumer Confidence

Personal spending was up 0.3% in October, according to the Department of Commerce. This happened even with no gain in household incomes.

The Conference Board said its Consumer Confidence Index came in at 125.5 for November. Even though it has declined for four straight months, the index remains well above levels seen during the first half of the decade.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: The Institute for Supply Management provides its latest monthly index of U.S. manufacturing activity (November).

Wednesday: The ISM presents its November Non-Manufacturing Index, and Automatic Data Processing (ADP) publishes its November payrolls report.

Friday: November hiring data arrives from the Department of Labor, and the University of Michigan’s preliminary December Consumer Sentiment Index appears.

Source: Econoday, November 29, 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

Tuesday: Salesforce (CRM), Workday (WDAY)

Wednesday: RBC (RY)

Thursday: Dollar General (DG), TD Bank (TD)

Source: Zacks, November 29, 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.

A New Dow Milestone – Weekly Update for November 18, 2019

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The Week on Wall Street

Stock benchmarks were little changed for much of last week, but a rally occurred Friday after news broke that the U.S. and China could be closing in on the first phase of a new trade pact.

At Friday’s close, the Dow Jones Industrial Average crossed the 28,000 level. The Dow rose 1.17% for the week, outgaining the S&P 500 (which advanced 0.89%) and the Nasdaq Composite (which added 0.77%). The MSCI EAFE index, representing developed overseas stock markets, fell 0.77%.

Will There Be a Trade Breakthrough? 

Friday, Secretary of Commerce Wilbur Ross told the media that “in all likelihood,” a phase-one trade deal between China and the U.S. would presently happen, stating that the talks were “down to the last details.” Thursday evening, White House economic adviser Larry Kudlow expressed similar optimism, noting that negotiations were “coming down to the short strokes.”

That said, the Wall Street Journal reported last week that President Trump is not yet committed to signing a phase-one trade deal. Secretary Ross noted that such an agreement would be “relatively limited in scope.”

Consumers Boost Their Buying

Retail sales advanced 0.3% in October, according to the Department of Commerce. That surpassed the 0.2% gain forecast by economists polled by MarketWatch. Even so, households bought fewer big-ticket items than they did in September.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: Minutes from the October Federal Reserve meeting appear.

Thursday: The National Association of Realtors presents data on October existing home sales.

Friday: The University of Michigan publishes its final Consumer Sentiment Index for November (an assessment of consumer confidence).

Source: Econoday, November 15, 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

Tuesday: Home Depot (HD), Medtronic (MDT), TJX Companies (TJX)

Wednesday: Lowe’s (LOW), Target (TGT)

Thursday: Intuit (INTU), Ross Stores (ROST)

Source: Zacks, November 15, 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.

October 2019 Market Update Video

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In this video, I will share some key market and economic insights as we enter the final quarter of 2019 and this decade. Some of the items I cover in this video include:

  • An update of stock market performance for the year
  • Which sectors have been leading and lagging the US stock market
  • Our thoughts on the current economic expansion (which is the longest in US history)
  • A look at the long-term trend of the stock market and where we think we are headed from here
  • An update on dividend yields
  • Why we think the probability of a recession in the near future is low
  • The impact of the trade war with China
  • How tariffs have impacted the manufacturing (hint: it’s at the lowest level we’ve seen since 2009)
  • An update on the Federal Reserve and what we expect for interest rates the rest of this year
  • Some thoughts on the 2020 election and what you should focus on as an investor
  • Stats on market performance during October, November, December (historically the best quarter of the year)

As you can see, I cover a lot of information in this video. My goal was to give you a thorough update on what you need to know to be an informed investor in less than 15 minutes.

If you have any questions or concerns about your financial situation, please give us a call at (419) 425-2400, or send us an email at hello@hzcapital.com. We would be happy to talk with you!

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