In this week’s recap: stocks dip as earnings season begins;
investors wait for the July Federal Reserve meeting, while considering retail
sales data and comments from Fed officials.
Weekly Economic Update
Presented by Troy
L Thompson, CFP July 23, 2019
THE WEEK ON WALL STREET
Stock
benchmarks retreated during the first week of the second-quarter earnings
season. As some big names shared quarterly results, investors seemed more
interested in what might happen at the Federal Reserve’s upcoming policy
meeting.
For
the week, the S&P 500 declined 1.23%. The Dow Jones Industrial Average lost
0.65%, and the Nasdaq Composite, 1.18%. International stocks, measured by the
week-over-week performance of the MSCI EAFE index, were down 0.79%.1-2
Households Bought More Last
Month
Retail
sales were up 0.4% in June, according to the Department of Commerce. Consumer
purchases account for more than two-thirds of America’s gross domestic product,
and data like this may rebut some assertions that the economy is losing steam.3
Traders
still expect the Federal Reserve to make a rate cut at the end of this month,
even with low unemployment, solid consumer spending, and stocks near record
peaks. Ordinarily, the Fed lowers interest rates to try to stimulate business
growth and investment when the economy lags. After ten years without a
recession, its new challenge is to make appropriate moves to ward off such a
slowdown.3
Will Wall Street’s
Expectations Be Met?
Thursday,
Federal Reserve Bank of New York President John Williams noted that Fed
policymakers could proactively adjust interest rates and take “preventative
measures” to ward off a potential slowdown. A New York Fed spokesperson later
said that Williams’ comments were “academic” and did not concern “potential
policy actions.” Still, Fed Vice President Richard Clarida made similar
comments last week, expressing the view that Fed officials “don’t have to wait
until things get bad to have a dramatic series of rate cuts.”4
Two
other Fed officials – Esther George and Eric Rosengren – have publicly stated that they are not in
favor of a cut.5
FINAL THOUGHT
About
25% of S&P 500 companies report earnings this week. In addition, the
federal government will present its first snapshot of the economy’s
second-quarter performance.
T I P O
F T H E W E E K
Beware of altering your investment mix in response to anxieties or short-term market fluctuations. Remember your time horizon and big-picture goals.
THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: The Census Bureau presents its June report on new home buying.
Friday: The Bureau of Economic Analysis releases its initial estimate of Q2
economic growth.
Source:
Econoday / MarketWatch Calendar, July 19, 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: Celanese
(CE), Halliburton (HAL), TD Ameritrade (AMTD)
Tuesday: Coca-Cola
(KO), Texas Instruments (TXN), Visa (V)
Wednesday: AT&T
(T), Boeing (BA), Facebook (FB), PayPal (PYPL)
Thursday: Alphabet
(GOOGL), Amazon (AMZN), Anheuser-Busch (BUD), Intel (INTC), Starbucks (SBUX)
Friday: AbbVie
(ABBV), Colgate-Palmolive (CL), McDonalds (MCD).
Source:
Zacks, July 19, 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 we could read the secret
history of our enemies, we should find in each man’s life sorrow and
suffering enough to disarm all hostility.”
Henry Wadsworth Longfellow
T H E W E E
K L Y R I D D L E
I’m a word that’s hardly there. Take
away my start, and I’m an herbal flair. What am I?
LAST
WEEK’S RIDDLE: Marking mortal privation, when firmly in place. An enduring
summation, inscribed on my face. What am I?
ANSWER:
A tombstone.
Thompson Financial Inc 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
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avoiding any Federal tax penalty. This is neither a solicitation nor
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are unmanaged and are not illustrative of any particular investment. Indices do
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directly. All economic and performance data is historical and not indicative of
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1 - wsj.com/market-data
[7/19/19]
2 - quotes.wsj.com/index/XX/990300/historical-prices [7/19/19]
3 - cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.htmll
[7/17/19]
4 - thestreet.com/markets/stocks-climb-rate-cut-hopes-microsoft-earnings-15025435
[7/19/19]
5 - cnbc.com/2019/07/19/feds-rosengren-not-on-board-for-rate-cut-i-think-we-should-wait.html
[7/19/19]
CHART CITATIONS:
quotes.wsj.com/index/SPX/historical-prices
[7/19/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
[7/19/19]
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