For the first time in months, U.S. markets experienced little movement last week. The Dow and NASDAQ did have their fifth week of gains in a row, but their increases were small: 0.12% and 0.11%, respectively. Meanwhile, the S&P 500 broke its four-week winning streak with a 0.22% loss. Internationally, the MSCI EAFE also posted modest returns, gaining 0.47% for the week.
What topics were on investors' minds?
Despite the relative lack of market drama last week, investors still had plenty to consider. For example, the following details emerged:
Conflicting messages came out on trade tension with China.
The International Monetary Fund (IMF) downgraded its forecast for global growth.
Corporate earnings season continued.
In addition, the longest federal government shutdown in history ended. After 35 days, the House and Senate voted unanimously to reopen the partially closed government. President Trump signed the bill, which includes funding through February 15th.
This week could provide far more action in the markets when a number of key details emerge.
What's ahead this week?
These last days of January provide several noteworthy updates, including:
Federal Reserve Meeting: Most people expect that the Fed will not increase rates this week. However, many investors will be studying how the central bank describes its plans for 2019 and assessment of the economy's strength.
Corporate Earnings: This week, 126 S&P 500 companies will release their earnings data. Major reports could help provide insight into everything from U.S. consumers to global industry.
China Negotiations: Chinese Vice Premier Liu and his delegation are coming to Washington to conduct additional trade discussions. As we have discussed for months, the ongoing tension is affecting markets as investors look for clarity on what may lie ahead.
One data point we may not receive this week is the initial reading of 4th quarter 2018 Gross Domestic Product. This report is one of many affected by the federal government shutdown. Although the government has reopened, we have yet to receive the latest data on retail sales, new home sales, durable goods orders, and more.
As the week unfolds, we will analyze all of the information that does come out - and continue to look for ways to pursue our clients' long-term goals in the current economic environment. If you have any questions about how these details affect your financial life, we're here to talk.
Tuesday: Consumer Confidence
Wednesday: ADP Employment Report, GDP
Thursday: Jobless Claims
Friday: Motor Vehicle Sales, PMI Manufacturing Index, ISM Mfg Index, Construction Spending, Consumer Sentiment
*The federal government shutdown may delay some data releases.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Gross Domestic Product (GDP) is a measure of output from U.S. factories and related consumption in the U.S. It does not include products made by U.S. companies in foreign markets.
The Federal Reserve System (also known as the Federal Reserve and, informally, as the Fed) is the central banking system of the United States. The Federal Reserve System is composed of 12 regional Reserve banks which supervise state member banks. The Federal Reserve System controls the Federal Funds Rate (aka Fed Funds Rate), an important benchmark in financial markets used to influence the supply of money in the U.S. economy.
The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C., of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.