S&P 500 Reaches a New Peak

The Weekly Update

Week of April 29, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks returned to record territory, with both the S&P 500 and the Nasdaq Composite closing at historic highs. The S&P gained 1.20% for the week; the Nasdaq, 1.85%. The Dow Jones Industrial Average lagged, losing 0.06%. The MSCI EAFE index of international stocks lost 0.52%.

The S&P took only 17 weeks to fully rebound from its December low.

A Shift in Focus
Last month, Wall Street fixated on trade, reacting to even the slightest hint of progress in U.S.-China negotiations. This month, the trade talks have taken a back seat, and the fixation is on earnings.

Anxieties about a possible earnings recession may be fading. So far, first-quarter results for S&P 500 firms are 5.3% above expectations; that compares to a 5-year average of 4.8%.

At some point, trade talk will come back, or other developments will lead Wall Street to chase other trends. The thing to remember is that Wall Street is fickle: what preoccupies it one week may be shrugged off the next. Short-term trends ultimately amount to background noise during the long-term pursuit of your financial goals.

A Strong First Quarter
Friday, the Bureau of Economic Analysis said that the economy expanded at a 3.2% pace in Q1. The number surprised to the upside. Economists surveyed by Dow Jones estimated Q1 gross domestic product would increase 2.5%.

What’s Ahead
Investors have all kinds of news to consider this week. There will be a plethora of earnings calls, plus important reports on consumer spending and hiring. Also, Federal Reserve chair Jerome Powell will hold a press conference following the central bank’s May meeting.

THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: March personal spending figures from the Department of Commerce.
Tuesday: The Conference Board’s April consumer confidence index.
Wednesday: The Federal Reserve announces its latest interest rate decision.
Friday: The April jobs report from the Department of Labor.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Alphabet (GOOGL), Kemper (KMPR)
Tuesday: Amgen (AMGN), Apple (AAPL), Cummins (CMI), McDonalds (MCD)
Wednesday: Allstate (ALL), CVS Health (CVS), Humana (HUM), Public Storage (PSA)
Thursday: CBS (CBS), Cigna (CI), Dunkin’ Brands (DNKN), Gilead Sciences (GILD)
Friday: Fiat Chrysler (FCAU)

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://markets.wsj.com/usoverview
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.bloomberg.com/news/articles/2019-04-23/abyss-averted-in-stocks-as-valuations-and-rates-restore-bull-run
https://insight.factset.com/earnings-season-update-april-26-2019
https://www.cnbc.com/2019/04/26/gdp-q1-2019-first-read.html
S&P 500 Reaches a New Peak2019-04-29T13:19:10-04:00

Six Steps to a College Internship

Six Steps to a College Internship

Higher education has been in the news a lot recently – both because of March Madness and the College Admissions Scandal – so we wanted to explore the topic further and share insights on how to land a summer internship that can build a student’s personal brand the right way. Take a look at our new article here http://bit.ly/college_internships

Six Steps to a College Internship2019-04-25T10:38:34-04:00

A Mild Week for the Market

The Weekly Update

Week of April 22, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
A short and relatively placid trading week wrapped up Thursday, with the major indices turning in mixed performances. The S&P 500 retreated 0.08%, the Nasdaq Composite advanced 0.17%, and the Dow Jones Industrial Average gained 0.56%. The MSCI EAFE index, tracking foreign stocks in developed countries, added 0.65%.

Nothing really catalytic emerged to drive the market last week, and volumes were low.

Earnings Season Update
More than 78% of S&P 500 firms reporting so far this earnings season have surpassed analyst expectations, according to FactSet. Since guidance tends to be conservative, there is the possibility that more companies will beat forecasts than expected.

The initial public offering market remained strong. Two high-profile technology companies came public on Thursday and were met with enthusiasm from investors. As mentioned in recent weeks, 2019 could be a banner year for IPOs.

Retail Sales Rebound
March’s 1.6% gain was the biggest monthly advance seen since September 2017. Sales of cars and gasoline rose more than 3%.

If the upcoming March consumer spending report is also impressive, concerns about the current business cycle peaking may recede.

Final Thought
Nearly 800 companies will report earnings this week, including some high-profile names. This kicks off five weeks of active daily earnings reports.

Investors will watch corporate profits, guidance, and fundamental indicators with great interest, to try and glean whether the economy is strengthening or softening. Reports on first-quarter economic growth and existing home sales will command particular attention.

THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: March existing home sales figures from the National Association of Realtors.
Tuesday: March new home sales numbers from the Census Bureau.
Friday: The first estimate of first-quarter gross domestic product (GDP) from the federal government, and the final April University of Michigan consumer sentiment index, a gauge of consumer confidence levels.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Halliburton (HAL), Kimberly-Clark (KMB), Whirlpool (WHR)
Tuesday: Coca-Cola (KO), Harley-Davidson (HOG), Procter & Gamble (PG), Twitter (TWTR), Verizon (VZ)
Wednesday: Anthem (ANTM), Boeing (BA), Caterpillar (CAT), Facebook (FB)
Thursday: 3M (MMM), AbbVie (ABBV), Amazon (AMZN), Starbucks (SBUX)
Friday: American Airlines (AAL), Colgate-Palmolive (CL), ExxonMobil (XOM)

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://quotes.wsj.com/index/SPX
https://quotes.wsj.com/index/DJIA
https://quotes.wsj.com/index/COMP
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.cnbc.com/2019/04/18/stocks-market-earnings-retail-sales-and-jobless-data-in-focus.html
https://www.reuters.com/article/us-usa-economy-retail/us-retail-sales-post-biggest-gain-in-one-and-a-half-years-in-march-idUSKCN1RU1GI
A Mild Week for the Market2019-04-22T12:46:51-04:00

The Q1 Earnings Season Begins

The Weekly Update

Week of April 15, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks broke out of a narrow range on Friday following news that two major banks grew their bottom line in the first quarter. For the week, the S&P 500 rose 0.79%; the Nasdaq Composite, 0.91%. The Dow Jones Industrial Average improved 0.50%. Turning to overseas stocks, the MSCI EAFE index declined 0.09%.

The market spent much of the week in a lull as investors waited for earnings season to begin. Wall Street is paying close attention to both guidance and profit margins.

Big Banks Post Solid Results
Friday, Wells Fargo and JPMorgan Chase both reported Q1 profit growth, and JPMorgan Chase announced record revenue.

This was welcome news. Analysts have tempered some of their expectations entering this earnings season, recognizing that slowing global growth, tariffs, and dollar strength may be affecting corporate profits. The dollar rallied 6.2% in Q1.

Inflation Picks Up
The Consumer Price Index rose 0.4% in March, the most in 14 months. This matched the consensus forecast of economists polled by MarketWatch, who believed rising gas prices would affect the number.

Even with this March jump, annual inflation remained relatively tame at 1.9%.

What’s Ahead
Note that U.S. stock and bond markets will be closed on Good Friday (April 19).

THE WEEK AHEAD: KEY ECONOMIC DATA
Thursday: March retail sales.
Friday: March housing starts and building permits.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Citigroup (C), Goldman Sachs (GS)
Tuesday: Bank of America (BAC), BlackRock (BLK), Comerica (CMA), IBM (IBM), Johnson & Johnson (JNJ), Netflix (NFLX), UnitedHealth Group (UNH)
Wednesday: Abbott Labs (ABT), Alcoa (AA), Bank of New York Mellon (BNY), Morgan Stanley (MS), PepsiCo (PEP), U.S. Bancorp (USB), United Rentals (URI)
Thursday: American Express (AMEX), Honeywell (HON), Manpower (MAN), Philip Morris (PM), Schlumberger (SLB), Travelers Companies (TRV), Union Pacific (UNP)

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://quotes.wsj.com/index/SPX
https://quotes.wsj.com/index/DJIA
https://quotes.wsj.com/index/COMP
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.cnn.com/2019/04/12/investing/wells-fargo-bank-earnings/index.html
https://finance.yahoo.com/news/5-best-stocks-buy-ahead-122412306.html
https://www.marketwatch.com/story/higher-gas-prices-boost-cost-of-living-in-march-but-inflation-still-soft-cpi-shows-2019-04-10
The Q1 Earnings Season Begins2019-04-15T14:30:25-04:00

Special Update: Quarterly Report

The Weekly Update

Week of April 8, 2019
By Christopher T .Much, CFP®, AIF®

The Week on Wall Street
Stocks just posted their second straight weekly gain. Investors were encouraged by the latest jobs report and new signs of progress on a U.S.-China trade deal. The Dow Jones Industrial Average advanced 1.17% in five trading days; the S&P 500, 1.27%; the Nasdaq Composite, 1.72%. The MSCI EAFE index of international stocks improved 1.84%.

The economy generated 196,000 net new jobs in March, according to the Department of Labor. Monthly job growth averaged 180,000 in the first quarter. Both President Trump and Chinese Vice Premier Liu He told the media last week that the U.S. and China were getting closer to a new trade accord.

Meanwhile, a week into the second quarter, another earnings season is about to unfold. As we await results, we will take a brief look back at what happened in the first quarter.

Quarterly Update
Stocks staged an impressive comeback in Q1, recovering nearly all of the losses incurred in the last three months of 2018.

Bullish Sentiment Increased
Investors were able to set some of their recent concerns aside, at least temporarily. The Federal Reserve indicated that it would pause interest rate hikes, and while no U.S.-China trade deal was completed during the quarter, the ongoing trade dispute cooled. The economy seemed healthy: the jobless rate was under 4%, hourly pay was rising at more than 3% a year, and inflation was tame.

Add in some upside from corporate earnings, and a recipe for gains emerged.

Stocks Had Their Best Quarter Since 2009
The Dow rose 11.15%; the S&P 500, 13.07%; the Nasdaq Composite, 16.49%. Additionally, this was the best first quarter seen on Wall Street since 1998.

The Fed Held Interest Rates Steady
In March, the Federal Reserve left the benchmark interest rate alone and indicated that it would not make a rate hike this year. As recently as December, the Fed had forecast two hikes for 2019.

What’s Ahead
The first-quarter earnings season kicks off this week with three big banks reporting results. The question is whether stocks in the S&P 500 will post earnings that beat analyst expectations to the degree they have in the past few quarters. Other questions: how will consumer confidence, wage growth, and job creation fare in Q2? Will there be a Brexit or a new U.S.-China trade pact this quarter, and if so, how will global markets react? If you have questions of your own as this quarter unfolds, remember that we are always here to talk.

THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: Minutes from the March Federal Reserve meeting, plus the latest Consumer Price Index, tracking monthly and yearly inflation.
Friday: The initial University of Michigan consumer sentiment index for April, which assesses consumer confidence.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Wednesday: Bed Bath & Beyond (BBBY), Delta Air Lines (DAL)
Thursday: Fastenal (FAST), Rite Aid (RAD)
Friday: JPMorgan Chase (JPM), PNC (PNC), Wells Fargo (WFC)

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://quotes.wsj.com/index/SPX
https://quotes.wsj.com/index/DJIA
https://quotes.wsj.com/index/COMP
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.cnn.com/2019/04/05/economy/march-jobs-report/index.html
https://www.cnbc.com/2019/04/05/stock-market-us-china-trade-nonfarm-payrolls-in-focus.html
https://www.usatoday.com/story/money/2019/03/29/dow-stocks-pace-best-quarter-decade-good-times-last/3311639002/
https://www.usatoday.com/story/money/2019/03/29/dow-stocks-pace-best-quarter-decade-good-times-last/3311639002/
Special Update: Quarterly Report2019-04-08T12:23:39-04:00

Gains Conclude a Great Quarter

The Weekly Update

Week of April 1, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street

Stocks ended last week higher as volatility slowed, completing their best quarter since 2009. A Friday tweet from Treasury Secretary Steven Mnuchin encouraged investors, referring to “constructive” discussions in the ongoing U.S.-China trade negotiations.

The S&P 500 gained 1.27% for the week. The Dow Industrials and Nasdaq Composite both exceeded that advance: the Dow rose 1.60%; the Nasdaq, 1.42%.

Foreign shares went the other way. The MSCI EAFE index following international stocks retreated 0.91%.

2019 Could Be a Big Year for IPOs

One of the ride-share pioneers, Lyft, closed on its initial public offering (IPO) on Friday, and a glance at the IPO calendar shows that as many as 226 companies could soon go public, with Uber and Airbnb possibly among them.

This IPO wave may be a signal of a market top, or it may point to a comeback for risk appetite, which could be healthy for the overall market.

Should some big-name IPOs stumble, it may deter others from moving ahead, which may influence the market psychology. Conversely, an enthusiastic reception may help support further market advances.

Good News for the Housing Market

The Fed’s dovish tone has also influenced home loan rates. Freddie Mac’s latest Primary Mortgage Market Survey shows an average interest rate of just 4.06% on a 30-year, fixed rate mortgage, compared with 4.28% a week earlier and 4.95% in December.

This news is especially significant given the recent pickup in existing home sales. They jumped 11.8% in February, the biggest monthly gain in more than three years.

Tax Tip

The federal income tax filing deadline is Monday, April 15, 2019. However, residents of Maine and Massachusetts have until Wednesday, April 17 to file their 2018 tax return. April 15 is Patriots’ Day, and April 16 is Emancipation Day.

THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: February retail sales.
Wednesday: ADP’s snapshot of March private sector hiring.
Friday: The Department of Labor’s March jobs report.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: GameStop (GME), Walgreens Boots Alliance (WBA)
Thursday: Constellation Brands (STZ)

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.marketwatch.com/story/stocks-end-higher-sp-records-strongest-quarter-in-a-decade-2019-03-29
https://quotes.wsj.com/index/SPX
https://quotes.wsj.com/index/DJIA
https://quotes.wsj.com/index/COMP
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.cnbc.com/2019/02/04/a-giant-ipo-wave-is-coming-as-unicorns-whet-investor-appetite.html
http://www.startribune.com/us-mortgage-rates-post-biggest-drop-in-decade-to-4-06-pct/507781302/
https://www.nar.realtor/newsroom/existing-home-sales-surge-11-8-percent-in-february
https://www.efile.com/tax-day-deadlines/
Gains Conclude a Great Quarter2019-04-01T12:44:14-04:00