In this week’s recap: Major equity indices correct as Wall Street
reacts to coronavirus updates, consumer confidence indices are at high levels,
and the pace of new home sales increases.
Weekly Economic Update
THE WEEK
ON WALL STREET
Stocks
fell sharply last week as Wall Street considered how the coronavirus outbreak
might influence global business activity and household spending.
The
selloff became a correction for the U.S. markets. The S&P 500 retreated
11.49%; the Dow Jones Industrial Average, 12.36%; the Nasdaq Composite, 10.54%.
The MSCI EAFE, tracking developed stock markets outside North America, had
fallen 6.75% week-over-week by Friday’s closing bell.
On
Friday afternoon, Federal Reserve Chair Jerome Powell stated that central bank
officials were willing to “use our tools and act as appropriate to support the
economy.”1,2,3
STRONG
CONSUMER CONFIDENCE, PLUS A BOOST FOR INCOMES
A
trio of economic indicators, pertaining to U.S. households, looked solid last
week. The Conference Board’s Consumer Confidence Index notched consecutive
months above 130 for the first time since July-August 2019, posting a 130.7
February mark. The University of Michigan’s final February Consumer Sentiment Index
came in at 101.0, ticking up from a preliminary 100.9.
Friday,
the Department of Commerce reported that Americans increased their personal
spending by 0.2% in January, while personal incomes improved 0.6%.4,5
Buyers
Have Flocked to New Homes
New
home sales, according to the Census Bureau, improved 7.9% in January; the
annualized pace of new home buying was the best seen since July 2007.
Year-over-year, sales were up 18.6%. Housing market analysts cited a favorable
economy and favorable weather as factors.6
FINAL THOUGHT
Right
now, there is no forecast for how the coronavirus outbreak may affect consumer
demand or supply chains. The impact may not be known for months. But remember,
your investment strategy should reflect your risk tolerance, time horizon, and
goals, and it also should take into consideration periods of market volatility.
Fear is driving decisions in the financial markets. Nobody would blame you if
this uncertainty gave you a bit of anxiety as well.
T I P O F
T H E W E E K
A market drop also presents an occasion to buy shares of large companies at a potentially lower cost.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Monday: The Institute for Supply
Management’s latest factory activity index arrives.
Wednesday: Automatic Data Processing
(ADP) publishes its February private payrolls report, and ISM’s index of
February service-sector business activity appears.
Friday: The Department of Labor
presents its February employment report.
Source:
MarketWatch, February 28, 2020
The MarketWatch 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
Tuesday: AutoZone (AZO), Ross
Stores (ROST), Target (TGT)
Thursday: Costco (COST), Kroger
(KR)
Source:
Zacks.com, February 28, 2020
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
“Time does not change
us. It just unfolds us.”
MAX FRISCH
T H E W E E K L Y
R I D D L E
You see us regularly,
but never at the same time. We appear everywhere but never
in the same place. What are we?
LAST WEEK’S
RIDDLE: Touching me is inevitable. I can send chills down spines. Even so, you
may welcome me. What am I?
ANSWER: The
wind.
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. Investments will fluctuate and when redeemed may
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Indices do not incur management fees, costs and expenses, and cannot be
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Additional risks are associated with international investing, such as currency
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3 - tinyurl.com/sbs2f9h [2/28/20]
5 - marketwatch.com/tools/calendars/economic [2/28/20]
wsj.com/market-data [2/28/20]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll
[2/28/20]
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