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Weekly Economic Update _7.8.2019

In this week’s recap: stocks hit record peaks, then descend after the Friday release of the June jobs report; further tariffs are planned for European imports.

Weekly Economic Update

July 8, 2019

 

THE WEEK ON WALL STREET

U.S. stock benchmarks opened a new quarter positively. The S&P 500 gained 1.65% in the opening week of July; the Dow Jones Industrial Average, 1.21%; the Nasdaq Composite, 1.94%. Overseas, stocks in developed markets, tracked by MSCI’s EAFE index, rose 1.43%.1-4

On July 3, the S&P posted its latest record close: 2,995.82. On July 5, stocks fell, slightly, after the Department of Labor released its June employment report.5

 

Jobs Report Beats Expectations

Analysts polled by Bloomberg thought the economy would add 160,000 net new jobs in June. Instead, the number was 224,000. The headline unemployment rate ticked up 0.1% to 3.7%; the U-6 rate, including the underemployed, also rose 0.1% to 7.2%.6

Before the large June gain was announced, traders were confident that the Federal Reserve would adjust interest rates this summer. This latest hiring data called that confidence into question. 

 

More Tariffs Slated for European Goods

The federal government plans to levy new import taxes on $4 billion of food and beverages coming from the European Union, the Office of the U.S. Trade Representative said last week. This would complement the tariffs on $21 billion worth of E.U. imports announced in April.7 

The U.S. and E.U. generate more than $1 trillion in commerce through trade relationships. European exports to the U.S., however, far outweigh U.S. exports to the E.U.7

 

WHAT’s AHEAD

Monday, July 15 will mark the start of the next earnings season. Money-center banks report first, followed by companies from a variety of industries.

 

T I P   O F   T H E   W E E K
A good, small-business invoice ideally states five things: the timeframe the company gives the client to pay, whether the client is permitted to pay upfront, whether late fees can be charged, the kinds of payments accepted, and if delivery will occur before or after receipt of payment.

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Federal Reserve Chairman Jerome Powell delivers opening remarks at a conference of the Federal Reserve Bank of Boston.

Wednesday: Fed Chair Powell testifies on monetary policy in Congress, and the Fed also releases the minutes from its June meeting.

Thursday: The June Consumer Price Index appears, showing monthly and yearly changes in inflation.

Source: Econoday / MarketWatch Calendar, July 5, 2019

The Econoday and MarketWatch economic calendars list 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: PepsiCo (PEP)

Wednesday: Bed Bath & Beyond (BBBY)

Thursday: Delta Air Lines (DAL), Fastenal (FAST)

Source: Zacks.com, July 5, 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

“All our discontent at what we lack results from lack of gratitude for what we have.”

DANIEL DEFOE

 

T H E   W E E K L Y   R I D D L E

Pronounced as one letter, written with three, there are only two letters in me. I’m read from both ends, and the same either way. What word am I?

 

LAST WEEK’S RIDDLE: What is the difference between a schoolboy studying and a farmer watching his cattle?

ANSWER: One is stocking his mind, while the other is minding his stock.

 

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.

CITATIONS:

1 - quotes.wsj.com/index/SPX/historical-prices [7/5/19]

2 - quotes.wsj.com/index/DJIA/historical-prices [7/5/19]

3 - quotes.wsj.com/index/COMP/historical-prices [7/5/19]

4 - quotes.wsj.com/index/XX/990300/historical-prices [7/5/19]

5 - marketwatch.com/story/sp-500-heads-for-3rd-straight-record-ahead-of-private-sector-jobs-report-2019-07-03 [7/3/19]

6 - fortune.com/2019/07/05/us-hiring-jobs-data-rebounds/ [7/5/19]\

7 - cnn.com/2019/07/02/economy/us-tariffs-on-eu/index.html [7/2/19]

 

CHART CITATIONS:

quotes.wsj.com/index/SPX/historical-prices [7/5/19]

quotes.wsj.com/index/DJIA/historical-prices [7/5/19]

quotes.wsj.com/index/COMP/historical-prices [7/5/19]

tradingview.com/markets/indices/quotes-us/ [7/5/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019 [7/5/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [7/5/19]

 

Weekly Economic Update _7.1.2019

In this week’s recap: a strong month for equities ends with the renewed possibility of a U.S.-China trade pact.

Weekly Economic Update

July 1, 2019

 

THE WEEK ON WALL STREET

A month of gains for stocks ended with a weekly retreat. The S&P 500 lost 0.30%; the Nasdaq Composite, 0.32%; the Dow Jones Industrial Average, 0.45%. In contrast, overseas shares, tracked by the MSCI EAFE index, advanced 0.14%.1-2

Last month was the best June for the blue chips since 1938, the best month for the S&P since 1955. The Dow gained 6.9% in June; the S&P, 6.2%.3

 

Trade Talks Could Soon Restart

All week, investors had one eye on Saturday’s Group of 20 summit in Japan, where President Trump and Chinese President Xi Jinping were slated to meet. This weekend, President Trump announced that he and President Xi had agreed to a resumption of trade talks between the U.S. and China. As part of that agreement, the U.S. is holding off on placing tariffs on an additional $300 billion of Chinese goods.4

While trade tensions certainly remain between both countries, the news that formal discussions could resume may renew investor optimism about progress toward a trade pact. 

 

Powell Cautions Against Adjusting Rates Too Quickly

In the meantime, Federal Reserve Chairman Jerome Powell attracted attention with new remarks on monetary policy. Powell stated last week that the Fed officials were “mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment.”5 

While many traders think the central bank will lower the benchmark interest rate at its July meeting, Powell noted that there was not yet consensus for a cut among Fed policymakers.5

 

What’s AHEAD

This will be a holiday-shortened trading week. The New York Stock Exchange will close early Wednesday, and all U.S. financial markets will close Thursday for the July 4 holiday. Markets reopen on Friday.

 

T I P   O F   T H E   W E E K
Your home insurance policy should include a code rider. This provision stipulates that your insurer will cover the costs of bringing your home back up to code during a rebuild. If your home is decades old, some of the wiring, roofing, and plumbing may need upgrades to meet current standards.

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: The Institute for Supply Management’s latest Purchasing Manager Index for the factory sector, considered the main barometer of the state of U.S. manufacturing.

Wednesday: Payroll giant ADP’s private-sector employment report for June.

Friday: The June jobs report from the Department of Labor.

Source: Econoday / MarketWatch Calendar, June 28, 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

No major earnings reports are scheduled for this week.

 

Q U O T E   O F   T H E   W E E K

“The longer I live, the more beautiful life becomes.”

FRANK LLOYD WRIGHT

 

T H E   W E E K L Y   R I D D L E

What is the difference between a schoolboy studying and a farmer watching his cattle?

LAST WEEK’S RIDDLE: A horse was tied to a rope 5 meters long, and the horse’s food was 15 meters away. How did the horse reach the food?

ANSWER: The rope isn’t tied to anything besides the horse, allowing the horse to roam freely.

 

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.

CITATIONS:

1 - wsj.com/market-data [6/28/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [6/28/19]

3 - foxbusiness.com/markets/us-stocks-wall-street-june-28-2019 [6/28/19]

4 - bloomberg.com/news/articles/2019-06-29/xi-trump-agree-to-restart-trade-talks-china-says [6/29/19]

5 - thestreet.com/markets/feds-powell-suddenly-facing-dissent-says-tk-14998647 [6/25/19]

CHART CITATIONS:

wsj.com/market-data [6/28/19]

quotes.wsj.com/index/SPX/historical-prices [6/28/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [6/28/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [6/28/19]

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