While the U.S. consumer remains resilient, CEO confidence has been deteriorating as economic uncertainty has been increasing.
Show Me the Money
Investment Strategy Video Fourth Quarter 2019: Holding Pattern
Significant Risks
For the week, the S&P 500 returned -1.41 percent and the 10-year U.S. Treasury bond yield declined to 1.51 percent. On Friday, the S&P 500 declined by more than 2.5 percent on news that China had escalated the trade war which was coupled with a similar response from the White House.
Investment Strategy Video Third Quarter 2019: Mounting Headwinds
Market Letter Third Quarter 2019: Mounting Headwinds
This Will Get Your Attention
We have continued to closely monitor economic indicators for tariff-related impacts on business confidence but up to now it didn’t seem to have affected sentiment. However, that narrative seems to be changing, and we expect the administration will take note.
A Curve Ball in May
As first quarter reporting season draws to another constructive close, investors’ attention was ripped away from the earnings scorecard and refocused almost exclusively on trade.
Tariffs Hit the Spin Cycle
Although tariffs and trade disputes have been front and center in the news, their impact may not yet be felt by U.S. consumers. If you’ve purchased a washer and dryer recently, it’s likely that you now have firsthand and inadvertent experience bearing their cost.
Market Seesaw
With a week subdued by a day of mourning, traders hoped market volatility would follow suit: it did not. In less than three trading sessions the S&P 500 traded down five percent, the Dow Jones Industrial Average lost more than 1,400 points and small cap stocks lost 6 percent.
A Time for Thanksgiving
Q4 2018 Investment Strategy Video
Waning Days of Summer
As kids prepare to go back to school and families make plans for that last long weekend of summer vacation, investors enjoyed new highs for blue-chip stocks this week. Despite the ongoing uncertainty of trade policy, stocks continue to ascend a wall of worry, having digested another quarter of robust earnings growth in part the result of faster U.S. economic growth.
Tariff and Turkey Talk
A currency crisis in Turkey and continued trade uncertainty resulted in a volatile week for equities. International stocks, specifically emerging markets, started selling off. U.S. commodities were also weak. This was offset by positive news on the China trade front.
Main Street Over Wall Street?
The current economic expansion has been punctuated by record profits for large corporations, and slow job and wage growth for U.S. consumers.
Shifting into Gear
Markets were inundated with a barrage of political, economic and stock-specific news this week, challenging investors to stay on top of it all.
Good News on the Jobs Front
Expectations and events often explain market movement. With earnings season underway next week, every earnings report will be judged on whether those expectations were exceeded, met or missed. Perhaps the most important aspect is if future growth outlook meets expectations.
Stressed Out
Over the last month, financials and industrials have been the two worst performing sectors in the S&P 500. While the industrials sector can be explained due to the strengthening U.S. dollar and trade rhetoric, financials have been more perplexing.
Short Stories
Trade concerns weighed on stocks this week resulting in a 1 percent decline for the S&P 500, and the Dow Jones Industrial Average falling close to 2 percent. Large-cap industrial stocks have taken the brunt of the pain due to their exposure to export markets, as well as increasing steel and aluminum costs due to recent tariffs.
Action and Reaction
With just a couple of weeks left to go in the second quarter, investors wanting for a lack of earnings news found plenty of economic reports and central bank meetings to freshen up their views of the macroeconomy.
Will Facebook Find Some Friends?
In the face of unquestionably strong economic data, global equities declined nearly 5 percent on the week with the S&P 500 falling close to 6 percent. The sharp selloff can be attributed to a confluence of factors, none of which will have any impact on near-term earnings momentum.