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Weekly Economic Update – October 14, 2019

In this week’s recap: Stocks pushed higher, the mood changed in the trade saga between U.S. and China, and quarterly earnings reports arrived.

THE WEEK ON WALL STREET

Stock prices pushed higher last week, as investors remained hyper-focused on any new developments with the U.S. trade negotiations with China.

The Dow Jones Industrial Average picked up 0.91%, while the Standard & Poor’s 500 rose 0.62%. The Nasdaq Composite index gained 0.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 2.28%.1,2

TRADE WINDS

For nearly two years, investors’ moods have seemed to swing with each twist in the ongoing trade saga between the U.S. and China. Last week was no different.

On Tuesday, stock prices fell sharply on concerns that U.S.-China trade tensions had escalated. The White House announced the addition of 28 new Chinese companies to its list of firms that are banned from doing business in the U.S. Later in the day, White House officials confirmed that they had implemented travel bans on selected Chinese officials.3,4

But prices bounced back Thursday and surged higher Friday on White House reports that suggested the trade talks between the two countries were “going really well.” Near the close Friday, the White House confirmed the U.S. has come to a “very substantial phase one deal” with China.5,6

QUARTERLY EARNINGS

Investors may start to get a better glimpse into third-quarter earnings this week, as more than 150 companies are expected to report on their operations.7

As “earnings season” gets underway, some attention may shift from the U.S.-China trade negotiations and toward company reports.

WHAT’S NEXT

Some U.S. financial markets will be open, and some will be closed, on Monday, October 14, in observance of the federal holiday Columbus Day. The U.S. bonds markets and most banks will be closed. But the New York Stock Exchange and the NASDAQ will be open for regular hours.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: September Retail Sales are reported before the markets open.

Thursday: Housing Starts for September are released. A “start” is defined as the beginning of excavation of the foundation for the building. Philadelphia Fed Business Outlook Survey. The survey can provide insights into the manufacturing sector.

Source: Econoday, October 11, 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

Tuesday: Netflix (NFLX), Johnson & Johnson (JNJ), The Goldman Sachs Group (GS)

Wednesday: Abbott Laboratories (ABT), United Rentals (URI), Winnebago Industries (WGO)

Thursday: Morgan Stanley (MS), PayPal Holdings (PYPL), Intuitive Surgical (ISRG)

Friday: Coca-Cola (KO), Schlumberger Limited (SLB), American Express (AXP)

Source: Zacks, October 11, 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.

 

WEEKLY QUOTE
“Employ thy time well, if thou meanest to get leisure.”
BENJAMIN FRANKLIN

WEEKLY TIP
A mental trick you can use to encourage consistent retirement saving – think of your monthly retirement contribution like a bill you need to pay.

WEEKLY RIDDLE
In terms of date and time, what was so significant about 3,661 seconds past midnight on January 1, 2001?

 LAST WEEK’S RIDDLE:
Tamara donated $1 million to a charity. After she donated all that money, she was a millionaire. Can you explain this?
ANSWER:
She was worth at least $2 million when she made the donation.

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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 [10/11/19]
2 – quotes.wsj.com/index/XX/990300/historical-prices [10/11/19]
3 – tinyurl.com/y29u6m2u [10/8/19]
4 – tinyurl.com/yyj9bh66 [10/8/19]
5 – cnbc.com/2019/10/10/trump-says-china-trade-talks-are-going-very-well.html?&qsearchterm=really%20well%20trump [10/10/19]
6 – cnbc.com/2019/10/11/trump-says-us-has-come-to-a-substantial-phase-one-deal-with-china.html [10/11/19]
7 – zacks.com/earnings/earnings-calendar [10/11/19]

 

CHART CITATIONS:

wsj.com/market-data [10/11/19]   

quotes.wsj.com/index/XX/990300/historical-prices [10/11/19]

quotes.wsj.com/index/SPX/historical-prices [10/11/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019 [10/11/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [10/11/19]