Weekly Update

The Weekly Update

Week of November 18th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stock benchmarks were little changed for much of last week, but a rally occurred Friday after news broke that the U.S. and China could be closing in on the first phase of a new trade pact.

At Friday’s close, the Dow Jones Industrial Average crossed the 28,000 level. The Dow rose 1.17% for the week, outgaining the S&P 500 (which advanced 0.89%) and the Nasdaq Composite (which added 0.77%). The MSCI EAFE index, representing developed overseas stock markets, fell 0.77%.

Will There Be a Trade Breakthrough?
Friday, Secretary of Commerce Wilbur Ross told the media that “in all likelihood,” a phase-one trade deal between China and the U.S. would presently happen, stating that the talks were “down to the last details.” Thursday evening, White House economic adviser Larry Kudlow expressed similar optimism, noting that negotiations were …

The Weekly Update

Week of November 11th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Domestic and international stocks rose last week. Risk appetite outweighed concerns about the state of U.S.-China trade discussions.

The Dow Jones Industrial Average, Nasdaq Composite, S&P 500, and MSCI EAFE all ended the week with gains. Blue chips led the way, as the Dow added 1.22%. The Nasdaq improved 1.06%; the S&P, 0.85%. The EAFE, tracking developed stock markets away from North America, was up 0.76%. The Dow recorded its third straight weekly gain; the S&P, its fifth.

Will Tariffs Phase Out or Remain?
Thursday, a spokesman for China’s commerce ministry said that U.S. and Chinese trade representatives had “agreed to remove” existing tariffs in “phases,” while working toward a new trade deal.

On Friday morning, President Trump told the media that he had not agreed to any such condition. President Trump and Chinese President Xi Jinping …

The Weekly Update

Week of November 4th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
A better-than-forecast jobs report prompted a stock market rally Friday, two days after traders witnessed another interest rate cut by the Federal Reserve.

Both the S&P 500 and Nasdaq Composite ended the week at historic peaks, while the Dow Jones Industrial Average settled less than 12 points under its all-time record close. The Nasdaq rose 1.74% for the week; the S&P gained 1.47%. The Dow added 1.44%. MSCI’s EAFE benchmark, which measures developed stock market performance outside the U.S. and Canada, improved 0.58%.

Economy Adds 128,000 Jobs in October
This net increase far surpassed the gain of 85,000 projected by a Bloomberg poll of economists. These job gains occurred even as last month’s General Motors strike impacted hiring in the manufacturing sector.

Unemployment rose slightly to 3.6% in October, an effect of more people entering the job …

The Weekly Update

Week of October 28th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
The S&P 500 came within 0.1% of a record close Friday. Stocks were lifted last week by positive news on U.S.-China trade negotiations, plus earnings announcements.

The Nasdaq Composite posted the largest weekly gain of the three major U.S. stock indices. It rose 1.90%. Last week also brought gains of 0.70% for the Dow Jones Industrial Average and 1.22% for the S&P. The MSCI EAFE, a benchmark for developed stock markets outside the U.S., rose 1.14%.

Another Hint of Progress in Trade Talks
Friday, the Office of the U.S. Trade Representative stated that parts of a new trade deal with China were near completion. No specifics were given as of Friday’s close, but the USTR noted that negotiators had “made headway” on key issues.

Analysts think both sides may cancel certain tariffs as part of a deal. …

The Weekly Update

Week of October 21st, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Earnings helped give the Nasdaq Composite and S&P 500 a slight lift last week, offsetting investor disappointment over the small scope of the preliminary U.S.-China trade deal reached on October 11. Blue chips took a small weekly loss.

The Nasdaq and S&P respectively gained 0.40% and 0.54% on the week. The Dow Jones Industrial Average retreated just 0.17%. Outdoing these three benchmarks, the MSCI EAFE index tracking stocks in developed overseas markets rose 1.35%.

The Early Earnings Picture
According to stock market analytics firm FactSet, 15% of S&P 500 companies had reported results through Friday’s close. Of those companies, 84% announced that net profits topping projections, and 64% said that revenues had exceeded forecasts.

One big question is whether overall earnings for S&P 500 firms will show year-over-year growth. There were no year-over-year earnings gains evident in …

The Weekly Update

Week of October 14th, 2019
By Christopher T. Much, CFP®, AIF®

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%.

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 …

The Weekly Update

Week of October 7th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
The fourth quarter started with a mixed week for equities. The Dow Jones Industrial Average lost 0.92% for the week; the S&P 500, 0.33%. In contrast, the Nasdaq Composite improved 0.54%. Overseas stocks pulled back: the MSCI EAFE index dipped 2.60%.

The Institute for Supply Management’s Manufacturing Purchasing Manager Index fell to 47.8 in September, its lowest level in ten years. Traders worried that the number reflected weakening business confidence. ISM’s latest Non-Manufacturing PMI also declined, but the 52.6 reading indicated growth in the service sector last month.

The Department of Labor said that employers added 136,000 net new workers in September. Unemployment was at 3.5%, a level last seen in December 1969. The U-6 jobless rate, which counts both the unemployed and underemployed, fell to a 19-year low of 6.9%. Monthly job creation has …

The Weekly Update

Week of September 30th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks retreated last week. Traders worried that the formal impeachment inquiry of President Donald Trump might distract White House officials from their pursuit of a trade deal with China and shift the focus of Congress away from consideration of the United States-Mexico-Canada Agreement (USMCA). Also, news broke Friday that the White House was considering restricting levels of U.S. investment in Chinese firms.

The Dow Jones Industrial Average lost less than the Nasdaq Composite and S&P 500. Blue chips declined 0.43% week-over-week, while the S&P fell 1.01% and the Nasdaq dipped 2.19%. The MSCI EAFE index, tracking developed overseas stock markets, lost 0.89%. , ,

Incomes Grow, Spending Slows
Data released Friday by the Bureau of Economic Analysis showed household incomes rising 0.4% in August. Consumer spending improved just 0.1%, however; that was the smallest personal spending …

The Weekly Update

Week of September 23, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Investors reacted to two major news items last week, one far more of a surprise than the other. The Federal Reserve did indeed make a rate cut, matching Wall Street expectations. Drone strikes on two of the world’s largest oil fields brought a shock to the global oil market.

At Friday’s closing bell, stocks wound up with weekly losses after news broke that Chinese trade officials were heading home dowfrom the U.S. sooner than planned. The S&P 500 retreated 0.51% week-over-week; the Dow Jones Industrial Average lost 1.05%, and the Nasdaq Composite dipped 0.72%. In developed foreign markets, shares tracked by the MSCI EAFE index fell 0.31%.

Another Quarter-Point Cut
Wednesday, the Federal Open Market Committee voted 7-3 to lower the benchmark interest rate by another 0.25%, to a range of 1.75% to 2.00%.

While traders looked …

The Weekly Update

Week of September 16, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks edged toward all-time peaks during a relatively calm week marked by easing trade tensions. Friday marked the eighth straight daily advance for the Dow Jones Industrial Average.

Small-cap shares, as tracked by the Russell 2000 index, rose 4.85% in five days. The S&P 500 improved 0.96% for the week, while the Dow and Nasdaq Composite respectively advanced 1.57% and 0.91%. Foreign shares added 1.22%, according to the MSCI EAFE index.

A Delay for Planned October Tariff Hikes
Existing tariffs on $250 billion of Chinese imports were slated to rise from 25% to 30% on October 1, but the White House decided Thursday to postpone the increase until October 15, in a “gesture of good will” honoring a request from Chinese Vice Premier Liu He.

Bloomberg reported last week that some White House officials were considering an …