Market Update – April 29, 2019
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%.[i],[ii]
The S&P took only 17 weeks to fully rebound from its December low.[iii]
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%.[iv]
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%.[v]
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.
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Past performance of investments is no indication of future results.
[i] https://markets.wsj.com/usoverview
[ii] https://quotes.wsj.com/index/XX/990300/historical-prices
[iii] https://www.bloomberg.com/news/articles/2019-04-23/abyss-averted-in-stocks-as-valuations-and-rates-restore-bull-run
[iv] https://insight.factset.com/earnings-season-update-april-26-2019
[v] https://www.cnbc.com/2019/04/26/gdp-q1-2019-first-read.html