October 27, 2019 Weekly Capital Market Update. All U.S. equity indexes were positive on the week with the Nasdaq leading the gains at +1.90% followed by the S&P 500® Index +1.22% and the Dow Jones Industrial Average +0.70%. China is pressing the U.S. to scrap the September and December tariff increases before significantly boosting agricultural purchases over the next two years as progress continues towards a Phase One agreement that Trump and Xi are expected to sign in November. So far with over 1/3 of the S&P 500 companies have reported, 80% of companies have beat EPS estimates to date for Q3, above the 5-year average of 72%; yet 9 of 11 S&P 500 sectors are reporting a year-over-year decline in net profit margins. Next week investors will remain focused on trade and earnings reports.
-October 19, 2019 Weekly Capital Market Update. The S&P 500 equity index posted its 2nd consecutive weekly gain of +0.54% on the strength of corporate earnings. For the week, the other U.S. indexes were mixed with the Nasdaq +0.40% while the Dow Jones Industrial Average fell -0.17%. With about 15% of the S&P 500 companies have reported, 84% of companies have beat EPS estimates to date for Q3, above the 5-year average of 72%. That said, revenue growth is running around +2.6% for Q3 2019, which would be the lowest revenue growth since Q2 2016. U.S. and Chinese negotiators are scheduled to meet next week to discuss Phase II trade agreement terms. Also, yield curves are finally normalizing, which means short to longer maturity has a steepening slope - no longer inverted.
-October 11, 2019 Weekly Capital Market Update. For the first time in four weeks, all U.S. equity indexes finished positive on news of improved China-U.S. trade relations: S&P 500 Index increased +0.62%, the Dow Jones Industrial Average was up +0.91% and the Nasdaq rose +0.93%. The White House announced the suspension of tariffs scheduled for next Tuesday on $250 billion worth of Chinese imports, and in turn, China agreed to purchase between $40-$50 billion of U.S. agricultural goods. Further, President Trump said that the U.S. and China had “agreed in principle” on a preliminary deal and added “we are very close to ending the trade war.” However, this “first stage” agreement has no impact on the preexisting tariffs costs and related negative ramifications on economies of both the U.S. and China. Next week market focus will be on the early company releases as earnings season starts; expectations are, once again, muted due to the preexisting tariff regime that has yet to be resolved.
-October 4, 2019 Weekly Capital Market Update. The equity returns for the week were mixed as the Nasdaq gained +0.54% while the S&P 500 Index and Dow Jones Industrial Average posted losses of -0.33% and -0.92%, respectively. Through September, the S&P 500 Index posted a year-to-date gain of 19%, its best performance since 1997. The U.S. economy continues to reflect on-going tariff-related stresses with 3rd quarter growth estimates ranging from as low as a 1.3% annualized rate to as high as a 1.9% pace. The economy grew at a 2.0% pace in the 2nd quarter, slowing from a 3.1% rate in the January-March period. Remarkably, robust U.S. employment hit a new milestone with the economy adding 136,000 jobs in September, moving unemployment down to 3.5% (the lowest level since December 1969). Unemployment rate usually rises ahead of a recession, so continued declines pushes out the timeline for any potential recession into late 2020. The markets were also impacted by a negative overhang related to political uncertainty in Washington after the Democratic-controlled U.S. House of Representatives impeachment inquiry against Trump, along with news that manufacturing shed 2,000 jobs last month - the first decline in factory payrolls since March.
-October 11, 2019 Weekly Capital Market Update. For the first time in four weeks, all U.S. equity indexes finished positive on news of improved China-U.S. trade relations: S&P 500 Index increased +0.62%, the Dow Jones Industrial Average was up +0.91% and the Nasdaq rose +0.93%. The White House announced the suspension of tariffs scheduled for next Tuesday on $250 billion worth of Chinese imports, and in turn, China agreed to purchase between $40-$50 billion of U.S. agricultural goods. Further, President Trump said that the U.S. and China had “agreed in principle” on a preliminary deal and added “we are very close to ending the trade war.” However, this “first stage” agreement has no impact on the preexisting tariffs costs and related negative ramifications on economies of both the U.S. and China. Next week market focus will be on the early company releases as earnings season starts; expectations are, once again, muted due to the preexisting tariff regime that has yet to be resolved.
-October 4, 2019 Weekly Capital Market Update. The equity returns for the week were mixed as the Nasdaq gained +0.54% while the S&P 500 Index and Dow Jones Industrial Average posted losses of -0.33% and -0.92%, respectively. Through September, the S&P 500 Index posted a year-to-date gain of 19%, its best performance since 1997. The U.S. economy continues to reflect on-going tariff-related stresses with 3rd quarter growth estimates ranging from as low as a 1.3% annualized rate to as high as a 1.9% pace. The economy grew at a 2.0% pace in the 2nd quarter, slowing from a 3.1% rate in the January-March period. Remarkably, robust U.S. employment hit a new milestone with the economy adding 136,000 jobs in September, moving unemployment down to 3.5% (the lowest level since December 1969). Unemployment rate usually rises ahead of a recession, so continued declines pushes out the timeline for any potential recession into late 2020. The markets were also impacted by a negative overhang related to political uncertainty in Washington after the Democratic-controlled U.S. House of Representatives impeachment inquiry against Trump, along with news that manufacturing shed 2,000 jobs last month - the first decline in factory payrolls since March.