In this week’s recap: the Dow and S&P 500 extend their winning streaks, even with conflicting messages emerging about U.S.-China trade negotiations; a gauge of U.S. business activity improves.

Weekly Economic Update

Presented by Tim Flick, November 11, 2019

 

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.1,2,3

 

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 are still expected to sign off on “phase one” of a new bilateral trade agreement.4

 

Service Sector Activity Picks Up

A closely watched index of U.S. business activity posted an October gain. The Institute for Supply Management’s Purchasing Managers Index for non-manufacturing firms rose nearly two points last month to 54.7. ISM also noted an increase for new orders in October.

As most U.S. companies provide services rather than manufacture products, this news is encouraging and suggests more momentum in that sector.5

 

FINAL THOUGHT

Monday is Veterans Day; the stock market will be open, but the bond market, plus all federal government offices, will be closed.

T I P   O F   T H E   W E E K

An emergency fund should be thought of as just that: a cash reserve for handling sudden sizable expenses. While it may be tempting to dip into it for other circumstances, its definition and purpose must be respected.

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: Federal Reserve Chairman Jerome Powell begins two days of testimony on the country’s economic outlook in Congress, and the Bureau of Labor Statistics presents new inflation data in the October Consumer Price Index.

Friday: October retail sales figures arrive from the Census Bureau.

Source: Econoday, November 8, 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: Praxair (LIN), Tyson Foods (TSN)

Wednesday: Cisco (CSCO)

Thursday: Applied Materials (AMAT), Nvidia (NVDA), Walmart (WMT)

Source: Zacks.com, November 8, 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

“It is our responsibilities, not ourselves, that we should take seriously.”

PETER USTINOV

 

T H E   W E E K L Y   R I D D L E

I float when I am born, lay down when I am alive, and run when I am dead. What am I?

 

LAST WEEK’S RIDDLE: Jennifer is 20 years old, yet why has her birthday occurred only five times in her life?

ANSWER: She was born on February 29 during a leap year.

 

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. The MSCI EAFE Index is a stock market index that is designed to measure the equity market performance of developed markets outside of the U.S. and Canada. 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 [11/8/19]

2 – quotes.wsj.com/index/XX/990300/historical-prices [11/8/19]

3 – marketwatch.com/story/stock-futures-bounce-around-as-wall-street-weighs-china-us-tariff-rollback-talk-2019-11-08 [11/8/19]

4 – cnbc.com/2019/11/08/trump-says-he-has-not-agreed-to-roll-back-tariffs-on-china-after-week-of-trade-optimism.html [11/8/19]

5 – briefing.com/Investor/Calendars/Economic/Releases/napmserv.htm [11/5/19]

 

CHART CITATIONS:

wsj.com/market-data [11/8/19]

quotes.wsj.com/index/XX/990300/historical-prices [11/8/19]

quotes.wsj.com/index/SPX/historical-prices [11/8/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [11/8/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [11/8/19]