In this week’s recap: stock indices again set records, the
Fed makes its third rate cut of the year, October’s employment report is a nice
surprise, and U.S. and Chinese trade negotiators make some progress.
Weekly Economic Update
THE WEEK
ON WALL STREET
A
better-than-forecast jobs report prompted a stock market rally Friday, two days
after traders witnessed another interest rate cut by the Federal Reserve.
Both
the S&P 500 and Nasdaq Composite ended the week at historic peaks, while
the Dow Jones Industrial Average settled less than 12 points under its all-time
record close. The Nasdaq rose 1.74% for the week; the S&P gained 1.47%. The
Dow added 1.44%. MSCI’s EAFE benchmark, which measures developed stock market
performance outside the U.S. and Canada, improved 0.58%.1,2,3
Economy
Adds 128,000 Jobs in October
This
net increase far surpassed the gain of 85,000 projected by a Bloomberg poll of
economists. These job gains occurred even as last month’s General Motors strike
impacted hiring in the manufacturing sector.
Unemployment
rose slightly to 3.6% in October, an effect of more people entering the job
market. Likewise, the U-6 rate, counting both unemployed and underemployed
Americans, ticked up to 7.0%.4
The
Fed’s Latest Interest Rate Decision
Last
week, the central bank made its third quarter-point rate cut since July,
leaving the target range for the federal funds rate at 1.50-1.75%.
Something
was missing from the latest Fed policy statement. Since June, a passage had
noted that the Fed was ready to “act as appropriate to sustain the expansion.”
In the latest statement, that language disappeared. At a press conference
Wednesday, Fed Chair Jerome Powell commented that Fed officials “see the
current stance of monetary policy as likely to remain appropriate.”5
Where
Trade Talks with China Stand
There
were further negotiations between U.S. and Chinese officials Friday, and
China’s commerce ministry announced that both sides had “reached consensus on
principles” integral to the first phase of a new trade pact. U.S. Trade
Representative Robert Lighthizer noted only that the latest round of
conversation had brought “progress in a variety of areas.”6
T I P O F
T H E W E E K
A thorough business plan should also identify your target audience: who wants your service or product, why they are interested in it, and the problem your solution solves. Interviews, research, and surveys can come in handy here.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Tuesday: The Institute for Supply Management presents its
latest Purchasing Managers Index for the U.S. service sector, gauging business
activity and new orders.
Friday: The University of Michigan’s preliminary November Consumer
Sentiment Index appears, measuring consumer confidence levels.
Source:
Econoday, November 1, 2019
The Econoday economic calendar lists 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: Marriott International (MAR), Sysco (SYY), Uber (UBER)
Tuesday: Allergan (AGN), Toyota (TM)
Wednesday: CVS Health (CVS), Qualcomm (QCOM)
Thursday: Booking Holdings (BKNG), Walt Disney Co. (DIS)
Friday: Duke Energy (DUK), Enbridge (ENB), Honda (HMC)
Source:
Zacks, November 1, 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
“We cannot fail to win unless we fail to try.”
TOM CLANCY
T H E W E E K L Y
R I D D L E
Jennifer is 20 years old, yet why has her birthday occurred only five times in her life?
LAST WEEK’S
RIDDLE: Round like an apple and deeper than a cup, yet all the king’s horses
can’t pull it up. What is it?
ANSWER: A well.
Troy L Thompson may be
reached at 515-432-5421 or troy@troythompsonfinancialinc.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.
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
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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. The MSCI EAFE Index is designed to
represent the performance of large and mid-cap securities across 21 developed
markets, including countries in Europe, Australasia and the Far East, excluding
the U.S. and Canada. 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
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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,
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2 - wsj.com/market-data [11/1/19]
3 - quotes.wsj.com/index/XX/990300/historical-prices [11/1/19]
4 - time.com/5716189/us-adds-128000-jobs-october-2019/ [11/1/19]
5 - cnbc.com/2019/10/30/fed-decision-interest-rates-cut.html [10/30/19]
6 - foxbusiness.com/markets/us-china-trade-talks-reach-consensus-on-principles?cmpid=prn_investors
[11/1/19]
CHART CITATIONS:
quotes.wsj.com/index/XX/990300/historical-prices
[11/1/19]
quotes.wsj.com/index/SPX/historical-prices
[11/1/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019
[11/1/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll
[11/1/19]
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