In this week’s recap: Wall Street maintains its risk-on mood,
even as tensions grow between the U.S. and Iran, influenced by a White House
tweet and a dovish signal from the Federal Reserve.
Weekly Economic Update
THE WEEK ON WALL STREET
The
S&P 500 hit an all-time peak of 2,964.03, in intraday trading Friday, while
improving 2.20% across five market days. The Dow Jones Industrial Average and
Nasdaq Composite posted respective, 5-day advances of 2.41% and 3.01%. In
addition, the MSCI EAFE benchmark of overseas stocks rose 2.58%.1-3
A
White House tweet and the latest monetary policy outlook from the Federal
Reserve sent the bulls running. These were the top two financial news items in
an eventful week – a week in which the value of West Texas Intermediate crude
rose 9.4%, the price of gold went above $1,400 for the first time in six years,
and the 10-year Treasury yield fell below 2%. (Treasury yields fall when their
prices rise, and vice versa.)1
The Fed’s June Policy
Statement
The
central bank stood pat on interest rates this month, but the expectations of
some of its policymakers changed. About half the 17 Fed officials who have a
say in monetary policy now project either one or two quarter-point rate cuts by
the end of the year. As recently as March, no Fed official saw grounds for a
2019 cut.4
Markets
interpreted this shift as a sign that the Fed might soon ease. While a rate cut
is by no means a given, traders now believe that the Fed will make either a
quarter-point or half-point cut at its July meeting.5
Last Tuesday’s
Market-Moving Tweet
A
day earlier, stocks rose after President Trump stated that he and Chinese
President Xi Jinping “will be having an extended meeting” at this week’s G-20
summit in Japan.6
Investors
were encouraged by this note, sensing a chance for progress in U.S.-China trade
talks.
Final Thought
With
tensions persisting between Iran and the U.S., investors are keeping a close
eye on both commodity prices and stock indices. Economic or geopolitical
developments could heavily influence the short-term movement of the markets.
T I P O
F T H E W E E K
A no-exam life insurance policy may sound expedient and convenient, but keep this reality in mind: policies that are medically underwritten are usually more affordable than those that are not.
Tuesday: The Census Bureau’s snapshot of May new home buying and the Conference
Board’s monthly consumer confidence index.
Thursday: The federal government’s third (“final”) estimate of first-quarter gross
domestic product.
Friday: May consumer spending data from the Department of Commerce as well as the
final June consumer sentiment index from the University of Michigan, another
key gauge of consumer confidence.
Source:
Econoday / MarketWatch Calendar, June 21, 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
Monday: Carnival
(CCL)
Tuesday: FedEx
(FDX), Micron Technology (MU)
Wednesday: General
Mills (GIS), Kraft Heinz (KHC), Paychex (PAYX)
Thursday: Accenture
(ACN), Nike (NKE), Walgreens Boots Alliance (WBA)
Friday:
Constellation Brands (STZ)
Source:
Zacks.com, June 21, 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
“If you want to be respected by others,
the great thing is to respect yourself. Only by that, only by self-respect
will you compel others to respect you.”
Fyodor Dostoevsky
T H E W E E
K L Y R I D D L E
A horse was tied to a rope 5 meters
long, and the horse’s food was 15 meters away. How did the horse reach
the food?
LAST
WEEK’S RIDDLE: What is the worst vegetable to have on a ship?
ANSWER:
A leek.
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.
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1 - cnbc.com/2019/06/21/it-was-a-monumental-week-for-markets-with-major-milestones-in-stocks-bonds-gold-and-oil.html
[6/21/19]
2 - wsj.com/market-data [6/21/19]
3 - quotes.wsj.com/index/XX/990300/historical-prices [6/21/19]
6 - cnbc.com/2019/06/18/trump-says-he-and-chinas-xi-spoke-will-have-extended-meeting-next-week-at-g-20.html
[6/18/19]
CHART CITATIONS:
quotes.wsj.com/index/SPX/historical-prices [6/21/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
[6/21/19]
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