In this week’s recap: the S&P 500 and Dow Jones
Industrial Average close at historic peaks after bulls consider Capitol Hill testimony
from Federal Reserve Chairman Jerome Powell; tame inflation persists.
Weekly Economic Update
Presented by Troy
L Thompson, CFP July 16, 2019
THE WEEK ON WALL STREET
Friday,
the S&P 500 settled above 3,000 for the first time, after rising 0.78% for
the week. The Dow Jones Industrial Average chalked up a milestone of its own:
the blue chips ended the week above 27,000, gaining 1.52% on the way.
Additionally, the Nasdaq Composite wrapped up the week 1.01% higher. The MSCI
EAFE index, a gauge of overseas developed markets, fell 0.65%.1-3
Stocks
rallied at mid-week with help from Federal Reserve Chairman Jerome Powell’s
congressional testimony on monetary policy, plus the latest Fed meeting
minutes.
Jerome Powell’s Statements
Wednesday,
Chairman Powell told Capitol Hill lawmakers that “uncertainties around global
growth and trade continue to weigh on the outlook” of the Federal Open Market
Committee. He also noted that “manufacturing, trade, and investment are weak
all around the world.”4
On
the same day, the Fed presented the minutes of its June policy meeting. The
record shared the belief of some Fed officials that "a near-term cut in
the target range for the federal funds rate could help cushion the effects of
possible future adverse shocks to the economy.”4
Overall Inflation Remains
Muted
The
June Consumer Price Index, released last week by the Bureau of Labor
Statistics, measured only 1.6% yearly inflation. The Federal Reserve uses the
Bureau of Economic Analysis’ Core Personal Consumption Expenditures (PCE) Price
Index as its inflation barometer; in its latest edition, it showed just a 1.5%
year-over-year rise.5
Currently,
the Fed has a yearly inflation target of 2.0%. In the past, it has often raised
interest rates in response to increasing inflation, which can potentially slow
growth and affect hiring and employment levels. Absent significant inflation
pressure, such a response may not be forthcoming.5
FINAL THOUGHT
All
eyes are on corporate earnings this week, as prominent banks and about two
dozen other S&P 500 firms report second-quarter results. Market
participants have much to consider in terms of profits, revenue, and guidance.
T I P O
F T H E W E E K
Tuesday: Fed chair Jerome Powell delivers a speech on monetary policy at the G7
summit in France, and the Census Bureau releases its June retail sales report.
Friday: The University of Michigan presents its preliminary July consumer
sentiment index, measuring consumer confidence and perceptions of the economy.
Source:
Econoday / MarketWatch Calendar, July 12, 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: Citigroup
(C), J.B. Hunt (JBHT)
Tuesday: Goldman
Sachs (GS), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Wells Fargo
(WFC)
Wednesday: Bank of
America (BAC), Netflix (NFLX), Novartis (NVS), Abbott Labs (ABT)
Thursday: Microsoft
(MSFT), UnitedHealth (UNH)
Friday: American
Express (AXP)
Source:
Zacks, July 12, 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
“Be nice to people on your way up, because
you’re going to meet them all on your way down.”
JIMMY
DURANTE
T H E W E E
K L Y R I D D L E
Marking mortal privation, when firmly in place. An
enduring summation, inscribed on my face. What am I?
LAST
WEEK’S RIDDLE: Pronounced as one letter, written with three, there are only two
letters in me. I’m read from both ends, and the same either way. What word am
I?
ANSWER:
The word "eye."
Troy L Thompson, CFP may be reached at 515-432-5421
or troy@troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
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Troy
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.
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1 - cnbc.com/2019/07/12/stock-market-dow-futures-rise-after-fed-hints-at-rate-cut-ahead.html [7/12/19]
2 - wsj.com/market-data [7/12/19]
3 - quotes.wsj.com/index/XX/990300/historical-prices [7/12/19]
5 - reuters.com/article/us-usa-economy-inflation/u-s-core-cpi-posts-biggest-gain-in-nearly-1-1-2-years-idUSKCN1U61NR?il=0
[7/11/19]
quotes.wsj.com/index/SPX/historical-prices
[7/12/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
[7/12/19]
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