Weekly Economic Update
Presented by Troy L Thompson, CFP, February 13,
2019
THE WEEK ON WALL STREET
Major U.S.
stock benchmarks eked out slight gains last week, with corporate profit reports
and news about U.S.-China trade negotiations vying for investor attention over
five trading sessions.
The big
three ended the week little changed from where they settled the previous
Friday. The Dow Jones Industrials rose 0.17%, while the S&P 500 Index
gained 0.05%. The NASDAQ Composite ended the week up 0.47%. Looking at
international stocks, the MSCI EAFE index retreated 0.47%.1,2
eARNINGS SCORECARD
As of last Friday,
66% of all S&P 500 companies had reported fourth-quarter earnings. So far,
71% of these firms have announced earnings exceeding estimates, and 62% have
seen revenues top projections.3
Halfway
through earnings season, 2019 future guidance has been a mixed bag for S&P
500 companies. For Wall Street, future earnings can be just as important as
current earnings. We keep a close eye on both. 3
tariff TENSIONS
March 1 is
the 90-day deadline set by President Trump for a trade deal with China. If no
agreement is reached, the U.S. may consider a new round of tariffs. On
Thursday, news that President Trump and Chinese President Xi may not meet
before the March 1 deadline added to the market volatility.
The decision
by the U.S. on new tariffs may hinge on how much progress has been made toward
a new agreement. We do not expect that to become clear until the deadline
nears.
STate of THE SERVICE SECTOR
Many
indicators help economists take the pulse of the overall economy. The Institute
for Supply Management keeps a critical, but not widely followed, index, which
helps gauge the health of the service sector.
The January
reading on this index came in at 56.7. Any reading above 50 shows that the
service industry is seeing solid growth.4
FINAL THOUGHT
Over the next
several weeks, we are expecting more volatility as the markets digest economic
news, a new wave of corporate earnings, and twists and turns on the
geopolitical front. We will be watching to see if anything changes our
short-term and long-term view. If you have any questions, do not hesitate to
contact us.
T
I P O F T H E
W E E K
New parents should seek to create an emergency fund equivalent to 3-6 months of living expenses. Sticking to a budget can help a household save over time.
THE
WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: January’s Consumer Price Index, which measures monthly
and yearly inflation.
Thursday: December retail sales figures (a delayed release due to
the government shutdown).
Friday: January’s preliminary University of Michigan consumer
sentiment index, a gauge of consumer confidence levels.
Source: Econoday / MarketWatch Calendar, February 8, 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, including the shutdown of the government agency or change at the
private institution that handles the material.
THE
WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Loews Corp (L)
Tuesday: Activision Blizzard (ATVI), HubSpot (HUBS), Occidental Petroleum
(OXY)
Wednesday: Cisco (CSCO), Hilton Worldwide Holdings (HLT), Yelp (YELP)
Thursday: Applied Materials (AMAT), CBS (CBS), Coca-Cola (KO)
Friday: Deere & Co. (DE), PepsiCo (PEP)
Source: Morningstar.com, February 8, 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.
Q
U O T E O F T H E W E E K
“In all affairs it is a healthy thing now and then to hang a question mark on the things you have long taken for granted.”
BERTRAND RUSSELL
T
H E W E E K L Y R I D D L E
I have no eyes, ears, tongue, or nose, yet I
have the power to see, hear, taste,
and smell everything.
What am I?
LAST WEEK’S RIDDLE:
You can throw a ball 25’ and make it come right back to you, without the ball
hitting anything or being caught by anyone. How can you make this happen?
ANSWER: Throw the
ball straight up in the air.
Troy L Thompson, CFP may be
reached at 515-432-5421 or troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
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Troy Thompson, CFP
DBA: Thompson Financial, Inc.
and Hanson Asset Strategies
Securities offered through
FIRST HEARTLAND CAPITAL, INC.
Member FINRA & SIPC.
Thompson Financial is not affiliated with
FIRST HEARTLAND CAPITAL, INC.
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.
CITATIONS:
1 - markets.wsj.com [2/8/19]
2 - quotes.wsj.com/index/XX/990300/historical-prices
[2/8/19]
3 - insight.factset.com/earnings-season-update-february-8-2019
[2/8/19]
4 - instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1
[2/5/19]
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