Weekly Economic Update – April 29, 2019

In this week’s recap: stocks come all the way back from their December lows, Q1 growth surpasses expectations, and earnings take center stage.

Weekly Economic Update

Presented by William Mauro, April 29, 2019

 

THE WEEK ON WALL STREET

Stocks returned to record territory, with both the S&P 500 and the Nasdaq Composite closing at historic highs. The S&P gained 1.20% for the week; the Nasdaq, 1.85%. The Dow Jones Industrial Average lagged, losing 0.06%. The MSCI EAFE index of international stocks lost 0.52%. ^1-2

The S&P took only 17 weeks to fully rebound from its December low. ³

 

A SHIFT IN FOCUS

Last month, Wall Street fixated on trade, reacting to even the slightest hint of progress in U.S.-China negotiations. This month, the trade talks have taken a back seat, and the fixation is on earnings.

Anxieties about a possible earnings recession may be fading. So far, first-quarter results for S&P 500 firms are 5.3% above expectations, which compares to a 5-year average of 4.8%. ⁴

At some point, trade talk will come back, or other developments will lead Wall Street to chase other trends. The thing to remember is that Wall Street is fickle: what preoccupies it one week may be shrugged off the next. Short-term trends ultimately amount to background noise during the long-term pursuit of your financial goals.

 

A Strong first quarter

Friday, the Bureau of Economic Analysis said that the economy expanded at a 3.2% pace in Q1. The number surprised to the upside. Economists surveyed by Dow Jones estimated Q1 gross domestic product would increase 2.5%. ⁵

 

What’s ahead

Investors have all kinds of news to consider this week. There will be a plethora of earnings calls, plus important reports on consumer spending and hiring. Also, Federal Reserve chair Jerome Powell will hold a press conference following the central bank’s May meeting.

 

T I P   O F   T H E   W E E K

Too many business owners apply for loans too late . Financing is more likely to be approved when a business is financially stable . A loan arranged when a business is healthy could be used for business expansion as well as emergencies.

 

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: March personal spending figures from the Department of Commerce.

Tuesday: The Conference Board’s April consumer confidence index.

Wednesday: The Federal Reserve announces its latest interest rate decision.

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

Source: Econoday / MarketWatch Calendar, April 26, 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: Alphabet (GOOGL), Kemper (KMPR)

Tuesday: Amgen (AMGN), Apple (AAPL), Cummins (CMI), McDonalds (MCD)

Wednesday: Allstate (ALL), CVS Health (CVS), Humana (HUM), Public Storage (PSA)

Thursday: CBS (CBS), Cigna (CI), Dunkin’ Brands (DNKN), Gilead Sciences (GILD)

Friday: Fiat Chrysler (FCAU)

Source: Morningstar.com, April 26, 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

“You can only perceive real beauty in a person as they get older.â€

ANOUK AIMEE

 

 

T H E   W E E K L Y   R I D D L E

It walks on four legs in the morning, two legs at noon, and three legs in the evening. What is it?

 

LAST WEEK’S RIDDLE: It has keys that open no locks. Yet, it lets you enter and create spaces. What is it?

ANSWER: A keyboard.

 

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CITATIONS:

1 – markets.wsj.com/usoverview [4/26/19]

2 – quotes.wsj.com/index/XX/990300/historical-prices   [4/26/19]

3 – bloomberg.com/news/articles/2019-04-23/abyss-averted-in-stocks-as-valuations-and-rates-restore-bull-run [4/23/19]

4 – insight.factset.com/earnings-season-update-april-26-2019  [4/26/19]

5 – cnbc.com/2019/04/26/gdp-q1-2019-first-read.html [4/26/19]

CHART CITATIONS:

markets.wsj.com/usoverview [4/26/19]

 

quotes.wsj.com/index/SPX/historical-prices [4/26/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [4/26/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [4/26/19]