Weekly Economic Update
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%.1-2
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.”3-5
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 of these percentages are above 5-year averages.6
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 is also preparing its response to any new U.S. tariffs,
which could include manipulating its currency.
T I P O F
T H E W E E K
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.
Source: Econoday / MarketWatch Calendar, May 17, 2019
The Econoday and
MarketWatch economic calendars list 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), 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)
Source: Morningstar.com, May 17, 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
“Every great mistake has a halfway moment, a split second when it can be recalled and perhaps remedied.”
PEARL S. BUCK
T H E W E E K L Y
R I D D L E
Can you name two perennial vegetables? (That is, vegetables that
don’t need to be replanted and can live on to produce in a future growing
season?)
LAST WEEK’S RIDDLE: Name three
words in everyday English that begin with the letters “dw.”
ANSWER: Any three of these five
words will do: dwell, dwelling, dwarf, dweeb, and dwindle.
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 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
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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
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(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
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assistance is needed, the reader is advised to engage the services of a
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1 - wsj.com/market-data [5/17/19]
2 - quotes.wsj.com/index/XX/990300/historical-prices [5/17/19]
3 - reuters.com/article/us-usa-trade-china/tough-talk-from-china-leaves-trade-talks-with-u-s-in-limbo-idUSKCN1SN207
[5/17/19]
5 -
npr.org/2019/05/17/724357441/u-s-to-lift-tariffs-on-canadas-and-mexico-s-steel-and-aluminum
[5/17/19]
6 - insight.factset.com/market-punished-sp-500-companies-reporting-negative-eps-surprises-in-q1
[5/17/19]
CHART CITATIONS:
quotes.wsj.com/index/SPX/historical-prices
[5/17/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
[5/17/19]
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