Wednesday, April 29, 2020

Economic update for the week of April 29th, 2020


In this week’s recap: Markets react to the plunging oil prices, corporate earnings, and the first attempts to restart the U.S. economy.

Weekly Economic Update

Presented by Troy L Thompson, CFP     April 29, 2020

 

THE WEEK ON WALL STREET

Stock prices bounced around last week as investors reacted to wild swings in the price of oil and reports that called into question the efficacy of two potential virus treatments.

The Dow Jones Industrial Average retreated 1.93%, while the Standard & Poor’s 500 lost 1.32%. The Nasdaq Composite Index slipped 0.18%. The MSCI EAFE Index, which tracks developed stock markets overseas, declined 1.21%.1,2,3

 

Oil Wavers, Promising Virus Treatments Disappoint

Stocks opened the new week lower on the heels of a plunge in oil prices that saw the May oil futures contract fall into negative territory. While negative prices were largely reflective of technical issues associated with trading the contracts rather than the actual price of oil, the unprecedented move unsettled investors.

Stocks found some positive momentum as the week wore on, buoyed by corporate earnings reports that showed solid performance amid a challenging environment.

On two separate days, however, moves to the upside were derailed by disappointing news on promising COVID-19 treatments. One drug failed to produce positive results in its first trial, followed the next day by an FDA warning against taking chloroquine and hydroxychloroquine to treat COVID-19. Stocks managed to rally and trim the week’s losses during the final hours on Friday. 

 

The Economic Reopening Begins

States across the nation, including Georgia, Tennessee, South Carolina, and Texas, have begun the process of slowly reopening commerce, while Montana’s governor announced the first phase of restarting its economy.4,5

Each state is taking a different approach, potentially serving as a laboratory to help guide other states in their efforts to reopen businesses. From the market’s perspective, these early steps are not only hopeful signs that the journey to normalization may have begun, but they may provide important clues to how quickly business activity can rebound and the degree to which individuals resume social engagement – two important metrics that may influence the market in the weeks ahead.

 


 

T I P   O F   T H E   W E E K




Do you really need a weekly housecleaning service, a gardener, or a dog walker? The money you save by not using these services could go toward debts, an emergency fund, or investing.

 


 

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: Gross Domestic Product (GDP). Federal Open Market Committee (FOMC) Meeting Announcement.

Thursday: Jobless Claims.

Friday: Purchasing Managers Index (PMI): Manufacturing Index. Institute for Supply Management (ISM) Manufacturing Index.

Source: Econoday, April 24, 2020

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

Tuesday: Advanced Micro Devices (AMD), Ford Motor Company (F), Pfizer (PFE), Caterpillar (CAT), Starbucks (SBUX), Merck & Co. (MRK), United Parcel Service (UPS), D.R. Horton (DHI).

Wednesday: Microsoft (MSFT), Facebook (FB), Boeing (BA), Tesla (TSLA), Qualcomm (QCOM).

Thursday: Apple (AAPL), Amazon (AMZN), Visa (V), McDonald’s (MCD), Gilead Sciences (GILD).

Friday: Exxon Mobil (XOM), Chevron (CVX), Clorox (CLX), Abbvie (ABBV).

Source: Zacks, April 24, 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

 


“It is a kingly act to assist the fallen.”

OVID

 


 



 

T H E   W E E K L Y   R I D D L E

 


Can you name two perennial vegetables? (That is, vegetables that don’t need to be replanted and can live on, yielding a future growing season?)

 

LAST WEEK’S RIDDLE: Can you name a sport in which neither the spectators, nor the participants, know the score or the winner until the match ends?

ANSWER: Boxing.

 


 

Troy L Thompson, CFP may be reached at 515-432-5421 or troy@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.)


 

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. The Wall Street Journal, April 24, 2020. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. 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.

CITATIONS:


CHART CITATIONS:

The Wall Street Journal, April 24, 2020
The Wall Street Journal, April 24, 2020
Treasury.gov, April 24, 2020

Wednesday, April 22, 2020

Economic Update for the week of April 22nd, 2020


In this week’s recap: The White House makes plans to reopen the economy, as analysts examine the first-hard economic data reckoning the U.S. reaction to COVID-19.
Weekly Economic Update
 
Presented by Troy L Thompson, CFP      April 22, 2020
 
THE WEEK ON WALL STREET
Stock prices pushed higher last week as news of a White House plan to reopen the economy and reports of a potential COVID-19 treatment helped the market overcome weak economic data and an ugly start to the corporate earnings season.
The Dow Jones Industrial Average rose 2.21%, while the Standard & Poor’s 500 advanced 3.04%. The Nasdaq Composite Index gained 6.09% for the week. The MSCI EAFE Index, which tracks developed overseas stock markets, slumped 1.75%.1,2,3
Reality Hits
Until last week, the extent of the economic damage from COVID-19 lacked a lot of hard data. With the release of retail sales (down 8.7% for March), industrial production (down 5.4% in March), and new jobless claims of 5.2 million (bringing the four-week total to 22 million), the scope of economic trouble became clearer.4,5,6
Stocks wavered throughout the week as investors digested the economic data and balanced the reports against signs that the pandemic may have peaked. With news of a plan to restart the economy and promising test results of a COVID-19 treatment, market sentiment turned positive, sending stocks higher on the final day of trading and cementing the second consecutive week of gains. 
 
Corporate Earnings
Large banks kicked off the quarterly earnings season, reporting declines in profits as they hiked loan loss reserves and saw a contraction in consumer credit card use. The large loan loss reserves represent a sobering view on just how much the banks believe small businesses and consumers may be affected by the economic downturn.
 
Final Thought
With bank earnings reports, investors got an important – but limited – view of the state of the economy. This week’s earnings reports are expected to provide a much broader cross-section of the economy, with a number of consumer products, technology, industrial, transportation, and communication services companies reporting.
 
T I P   O F   T H E   W E E K


A cleverly promoted, inexpensive customer loyalty program may help your business realize improved long-term cash flow.
 
 
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Existing Home Sales. 
Thursday: New Home Sales. Jobless Claims.
Friday: Durable Goods Orders. Consumer Sentiment.
Source: Econoday, April 17, 2020
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: IBM (IBM), Halliburton (HAL)
Tuesday: Netflix (NFLX), Procter & Gamble (PG), Coca-Cola (KO), United Airlines (UA)
Wednesday: Facebook (FB), AT&T (T), Boeing (BA), Tesla (TSLA), Visa (V)
Thursday: Amazon (AMZN), Intel (INTC), Starbucks (SBUX), 3M Company (MMM), Southwest Airlines (LUV)
Friday: Verizon (VZ), American Airlines (AAL), American Express (AXP)
Source: Zacks, April 17, 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
 
“In a society of super-sophisticated communication, we often suffer from a shortage of listeners.”
ERMA BOMBECK
 
 
 
T H E   W E E K L Y   R I D D L E
 
Can you name a sport in which neither the spectators nor the participants know the score or the winner until the match ends?
 
LAST WEEK’S RIDDLE: Can you name a vegetable or fruit that is never sold frozen, canned, processed, cooked, or in any other form except fresh?
ANSWER: Lettuce.
 
 
Troy L Thompson, CFP may be reached at 515-432-5421 or troy@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.)
 
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. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. 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.
CITATIONS:
CHART CITATIONS:
The Wall Street Journal, April 17, 2020.
The Wall Street Journal, April 17, 2020.
Treasury.gov, April 17, 2020.