Weekly Update

The Weekly Update

Week of June 4, 2018
By Christopher T. Much, CFP®, AIF®

Markets experienced heightened volatility this week, with both the S&P 500 and Dow dropping 0.82% and 1.60% respectively. Meanwhile, the NASDAQ rose 0.24% as international markets took a small dip with the MSCI EAFE losing 1.10%.

The markets’ highs and lows came from a variety of economic and geopolitical developments. The U.S. jobs report posted solid gains while international trade concerns continued to cause some unease. In this market update, we’ll break down the major stories to help you understand what moved markets.

Impressive Jobs Report

Outstanding nonfarm payroll employment numbers rolled in on Friday, and the data supports a strong U.S. economy. Here is a snapshot of some key numbers:

• Unemployment dropped to 3.8%—its lowest recording in 18 years.
• Payroll growth jumped to 223,000, far beyond the expected 188,000.
• Average hourly earnings climbed 2.7%; as a result, the Fed …
  

The Weekly Update

Week of May 29, 2018
By Christopher T. Much, CFP®, AIF®

Geopolitical uncertainty affected stocks last week, as the historic summit between the U.S. and North Korea began to look less likely. On Thursday, May 24, President Trump announced that the summit was off, and stocks stumbled in reaction. The next day, Trump said the meeting might still occur next month, leaving investors questioning the eventual outcome.

Also, on the geopolitical front, an announcement that Saudi Arabia and Russia would consider easing back oil supply restrictions affected stocks. U.S. crude oil prices dropped in response, pulling energy stocks down with them.

Despite these developments, major domestic indexes increased last week. The S&P 500 gained 0.31%, the Dow added 0.15%, and the NASDAQ grew by 1.08%. International stocks dropped, with the MSCI EAFE decreasing by 1.60%.

What kept U.S. stocks in positive territory for the week?

Solid corporate earnings helped drive upward movement.

Several …

The Weekly Update

Week of May 21, 2018
By Christopher T. Much, CFP®, AIF®

Major domestic indexes went down last week after all three gained more than 2% the previous week. The S&P 500 dropped 0.54%, the Dow gave back 0.47%, and the NASDAQ lost 0.66%. International stocks also stumbled; the MSCI EAFE decreased by 0.61%.

Two familiar topics were on many investors’ minds last week: trade and treasuries. Here is a recap of the key details and their market impacts.

1. U.S. and China Resumed Trade Talks

Background:
Tension between the world’s 2 largest economies continued last week as the U.S. and China launched another round of trade discussions. Both countries have threatened billions of dollars of tariffs on the other’s products, but so far, neither has acted.

On Saturday, May 19, the countries released a joint statement saying they would take measures to “substantially reduce the United States’ trade deficit in goods with China.” …

The Weekly Update

Week of May 14, 2018
By Christopher T. Much, CFP®, AIF®

On Friday, the markets closed the week gaining traction. The Dow had 7 days of consecutive growth, rising 2.34%—its largest weekly gain since March. Meanwhile, the S&P 500 rose 2.41%, the NASDAQ jumped 2.68%, and the MSCI EAFE increased 1.41%.

Various factors came together to support the growth. From geopolitical topics to strong corporate earnings, we’ll focus on 3 key developments that drove movement.

1. Energy Shares Boosted by Iran Nuclear Deal Withdrawal

President Trump’s decision on Tuesday to withdraw from the Iran nuclear deal helped push the energy sector higher. With the possibility of renewed sanctions on the horizon, the anticipation of a pullback from global oil supplies helped boost prices. Though oil prices fell from a 3½-year high on Friday, it was the 2nd week of growth, driving energy shares to rise 3.8%.

2. Technology Sector Jumps Amid Strong …

Announcing the Launch of the CTS Resource Center

We focus on overall financial health, helping you meet your financial goals and live your best financial life. We believe that a financial life well-lived is collaborative and informed, empowering investors with the proficiency to ask the right questions of the right people. With this in mind, we are excited to launch the CTS Resource Center, focused on financial education 24-7. http://bit.ly/2I2GC4i

The Weekly Update

Week of May 6, 2018
By Christopher T. Much, CFP®, AIF®

Domestic indexes posted strong results on Friday, May 4, as the latest labor report data lessened investors’ concerns about inflation and interest rates. Nonetheless, stocks had mixed results last week. The S&P 500 dropped 0.24% and the Dow gave back 0.20%, which marked both indexes’ 2nd week of losses in a row. Thanks to a bounce in tech stocks, however, the NASDAQ gained 1.26%. International stocks in the MSCI EAFE decreased by 0.57%.

Amid this relatively tepid performance, we reached a big milestone on May 1: Our current economic expansion is now officially the 2nd longest on record. For 8 years and 10 months, the economy has been growing, and many sectors still have room to advance.

As we look to better understand where we stand today, Friday’s employment report provides key insights into our economic health.

What We Learned …

The Weekly Update

Week of April 30, 2018
By Christopher T. Much, CFP®, AIF®

We just finished the busiest week of 1st quarter earnings season, and although many companies shared positive results, stock indexes experienced modest declines. The S&P 500 lost 0.01%, the Dow dropped 0.62%, and the NASDAQ gave back 0.37%. International stocks in the MSCI EAFE decreased by 0.39%.

Last week provided a variety of information for investors to take in. On Friday, we received the initial reading of 1st-quarter Gross Domestic Product (GDP). The data came in more positive than analysts expected, with the economy experiencing 2.3% growth. The latest employment readings also showed costs for benefits and pay rising at the fastest pace in a decade. On the geopolitical front, the leaders of North and South Korea met for historic talks that could result in denuclearizing the Korean peninsula.

As we continue to watch these developments, we want to …

The Weekly Update

Week of April 23, 2018
By Christopher T. Much, CFP®, AIF®

Stocks posted moderate gains last week, as the S&P 500 added 0.52%, the Dow increased 0.42%, and the NASDAQ rose 0.56%. International stocks in the MSCI EAFE followed suit, gaining 0.41%.

We received numerous new data updates last week, and most provided positive news for the economy. Retail sales, housing starts, and industrial production all beat expectations and increased in March.

Amid last week’s primarily positive data updates, two key occurrences also affected markets:

1. Corporate earnings
2. Treasury yields

A Closer Look

1. Earnings Season Continued
As of April 20, about 16% of S&P 500 companies shared their results for the 1st quarter, and over 80% of them beat earnings expectations. However, this solid performance has yet to impress investors. While most companies have exceeded earnings projections, their stocks haven’t reflected the growth.

On the other hand, companies that have beaten their sales projections—but …

The Weekly Update

Week of April 16, 2018
By Christopher T. Much, CFP®, AIF®

Market volatility continues. Stocks slid on Friday, April 13, but still held on to gains for the week. The S&P 500 increased 1.99%, the Dow added 1.79%, and the NASDAQ was up 2.77%. International stocks in the MSCI EAFE also rose, gaining 1.45%.

As in recent weeks, international events continued to sway markets: Concerns about trade disputes affected investor behavior. Meanwhile, escalating conflict in Syria may have weighed on people’s minds.

As we track these developments, we want to share insight about another important occurrence from last week: the beginning of corporate earnings season.

1st Quarter Corporate Earnings Season

1. Expectations remain very high
Analysts anticipate a particularly strong earnings season. Thomson Reuters data predicts that S&P 500 companies’ profits were 18.6% higher in the 1st quarter of 2018 than in 2017. If accurate, this increase would be the largest since 2011.

So …

The Weekly Update

Week of April 9, 2018
By Christopher T. Much, CFP®, AIF®

Domestic stocks lost ground last week as trade war concerns continued to rattle investors. With these declines, the Dow officially moved back into correction territory. For the week, the S&P 500 lost 1.43%, the Dow dipped 0.95%, and the NASDAQ dropped 2.11%. International stocks in the MSCI EAFE managed a 0.38% increase.

An escalating trade dispute between the U.S. and China wasn’t the only headline to affect markets. Last week also brought surprising data from the Labor Department. In March, the economy added 103,000 new jobs—far lower than economists anticipated. Meanwhile, wages grew, and unemployment remained a low 4.1%.

We are now 1 week into the 2nd quarter of 2018. As we examine what may lie ahead in the markets, we will also focus on understanding what has happened so far this year. Here are a few key findings …