In this week’s recap: stocks fall after a Federal Reserve
rate cut, new tariffs are planned for Chinese goods, and payrolls see
triple-digit monthly growth.
Weekly Economic Update
THE WEEK
ON WALL STREET
Last
week, the Federal Reserve cut interest rates for the first time in more than a
decade, in line with Wall Street’s expectations. Ironically, stocks had their
worst week of 2019.
The
S&P 500 finished the week 3.10% lower. The Dow Jones Industrial Average and
the Nasdaq Composite also posted weekly losses; the blue chips fell 2.60%,
while the premier tech benchmark slumped 3.92%. International stocks tracked by
MSCI’s EAFE index dipped 1.06%.1-3
Fed Cuts
Benchmark Interest Rate
On
Wednesday, the central bank reduced the federal funds rate by 0.25%. The latest
Fed policy statement noted that “global developments” and “muted inflation”
influenced the decision.
Addressing
the media, Fed Chairman Jerome Powell described the cut as a “mid-cycle
adjustment.” After that comment, Wednesday’s trading session turned volatile on
the interpretation that the cut was a “one and done” move, instead of what
might be the first in a series.4
More
Tariffs Planned
Shares
also fell Thursday, after a White House tweet indicated that the U.S. would put
a 10% tariff on another $300 billion of goods coming from China, effective
September 1.
Practically
speaking, this would mean a tariff on nearly all Chinese products arriving in
America. So far, the announcement has not affected plans for trade delegates
from both nations to continue negotiations in September.5
The
Latest Hiring Data
Payrolls
expanded with 164,000 net new jobs in July, according to the Department of
Labor. The headline jobless rate stayed at 3.7%; it has now been under 4% for
17 months. The U-6 jobless rate, which counts both underemployed and unemployed
Americans, dipped to 7.0%, a level unseen since December 2000.
Monthly
job growth has averaged 140,000 over the past three months, compared to 187,000
in 2018.6
T I P O F
T H E W E E K
You may be inclined to help your adult children financially during your retirement, but think twice about doing so. Providing gifts or a personal loan (or cosigning on a loan they arrange) may put your own financial outlook at risk.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Monday: The Institute for Supply
Management releases its latest Non-Manufacturing Purchasing Managers Index, its
monthly gauge of business activity in America’s service sector.
Source:
Econoday / MarketWatch Calendar, August 2, 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: Marriott International
(MAR), Tyson Foods (TSN)
Tuesday: Walt Disney Co. (DIS)
Wednesday: American International
Group (AIG), CVS Health (CVS)
Thursday: Booking Holdings (BKNG),
Uber (UBER)
Source:
Zacks, August 2, 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
“Learning does not
consist only of knowing what we must or we can do, but
also of knowing what we could do and perhaps should not do.”
UMBERTO ECO
What two things
will you never be able to eat at dinner?
LAST WEEK’S
RIDDLE: Take one letter away from this 8-letter word, and you still have a
word. Take another letter away from the seven letters left, and you still have
a word. Keep on doing that, each time making a new word, until you have one
letter left. What is this word?
ANSWER: The
word is starting. Starting, staring, string, sting, sing, sin, in, I.
«representativename»
may be reached at 515-432-5421 or troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
Know
someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
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
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.
2 - wsj.com/market-data [8/2/19]
3 - wsj.com/index/XX/990300/historical-prices [8/2/19]
4 - forbes.com/sites/jjkinahan/2019/07/31/feds-quarter-point-rate-cut-weak-global-growth-trade-tensions-muted-inflation-cited
[7/31/19]
5 - cnn.com/2019/08/01/investing/asian-market-latest-trade-war/index.html
[8/1/19]
6 -
cnn.com/2019/08/02/economy/july-jobs-report/index.html [8/2/19]
CHART CITATIONS:
wsj.com/index/SPX/historical-prices
[8/2/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019
[8/2/19]
No comments:
Post a Comment