Weekly Market Sitrep: May 6, 2019
In this week’s sitrep: the Federal Reserve stands pat on interest rates, key indicators show strength, and stocks end the week little changed.
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%.1-2
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.”3
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 GDP reading that surprised to the upside. In another bit of good news, personal spending rose an impressive 0.9% in March.4-5
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.
TIP OF THE WEEK
If you are young and want to make financial progress out of college, consider starting your career in a metro area where housing and living expenses are relatively low. Some of the most “exciting” cities to live and work in are also some of the priciest, with their millennial and Gen Y residents deeply in debt.
THE WEEK AHEAD: KEY ECONOMIC DATA
Friday: The April Consumer Price Index, monitoring monthly and annual inflation.
Source: Econoday / MarketWatch Calendar, May 3, 2019 – 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 release of data may be delayed without notice for a variety of reasons.
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)
Source: Morningstar.com, May 3, 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.
QUOTE OF THE WEEK
“Do not go where the path may lead, go instead where there is no path and leave a trail.”
RALPH WALDO EMERSON
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
1 – markets.wsj.com/usoverview [5/3/19]
2 – quotes.wsj.com/index/XX/990300/historical-prices [5/3/19]
3 – bankrate.com/banking/federal-reserve/fomc-meeting-recap-april-may-2019 [5/1/19]
4 – nytimes.com/2019/05/03/business/economy/jobs-report-april.html [5/3/19]
5 – marketwatch.com/tools/calendars/economic [5/3/19]