Weekly Market Commentary
Market Commentary, June 15, 2020
The Nasdaq Composite dipped its toes into record territory last week before retreating.
Stock indices in the United States rallied early last week on optimism about the reopening of businesses across the country. The Nasdaq Composite rose to 10,000 for the first time ever, before...
Market Commentary, June 8, 2020
The employment report electrified U.S. stock markets last week. American stock markets responded enthusiastically to the news U.S. unemployment was 13.3 percent in
May. If it seems inexplicable double-digit unemployment would thrill investors, there is a reason. The unemployment rate in April was higher at 14.7 percent, and analysts had forecast the rate in May would jump to 19.1 percent. All in all, that makes 13.3 percent look pretty attractive.
There were some caveats...
Market Commentary, June 1, 2020
Are those green shoots?
In economic terms, green shoots are signs of improvement. If you were paying close attention, you might have seen some in economic data released last week.
They weren’t apparent in the Bureau of Labor Statistics report on the United States economy. Gross domestic product (GDP), which is the value of all goods and services produced in our country, shrank by...
Market Commentary, May 26, 2020
It was a good week for stock markets in the United States, but there was trouble in Asia.
U.S. stock markets rallied last week. The Dow Jones Industrial Average, Standard & Poor’s 500 Index, and Nasdaq Composite all gained more than 3 percent, reported Ben Levisohn of Barron’s.
Investors had plenty of fuel for optimism early in the week. On Sunday, Federal Reserve Chair Jerome Powell struck a positive tone during his 60 Minutes interview stating, “The big thing we have to avoid…is a second wave of the virus. But if we do, then...
Market Commentary, May 11, 2020
The stock market is not the economy.
It’s an important point to remember when headlines marvel that U.S. stock markets are moving higher while the U.S. economy is contracting. Stock markets are not mindful of the present moment. They are forward-looking, reflecting expectations about what will happen in the months and years to come, explained Mark Hulbert in a MarketWatch opinion piece.
In the present moment, the...
Market Commentary, May 4, 2020
There are signs COVID-19 may be in retreat.
Last week, the Centers for Disease Control reported, overall in the United States, for the week ending April 25 (officially week 17 of the coronavirus), the number of:
People visiting healthcare providers with COVID-19 symptoms declined.
- Positive tests at public health, clinical, and commercial laboratories declined or remained similar.
- Deaths attributed to pneumonia, influenza, or COVID-19 declined, too, although the percentage remains above normal.
This is good news since...
Market Commentary, April 27, 2020
We live in interesting times.
There is discussion about whether the saying, “May you live in interesting times,” is a blessing or a curse.
At this point in 2020, we all understand why. Last week, the world watched in consternation as the price of oil, specifically West Texas Intermediate
crude oil, dropped into negative territory. The price moved below...
Market Commentary, April 20, 2020
Last week’s economic data was about what you might expect in the midst of a virus crisis that has shut down businesses and forced people to stay home:
• Retail sales were down 8.7 percent in March. Retail sales track demand for everything from clothing to refrigerators. The March decline was the worst monthly performance on record, according to Ben Levisohn of Barron’s.
• Oil prices fell further. Saudi Arabia, Russia, and other nations agreed to reduce oil production, but that may not be enough to steady prices. The Economist explained...
Market Commentary, April 13, 2020
Why is the stock market doing so well when the COVID-19 pandemic has yet to peak?
At the end of last week, the Centers for Disease Control and Prevention reported the United States remains in the acceleration phase of the coronavirus pandemic. This phase ends when new cases of COVID-19 level off. The next phase should be a period of...
Market Commentary, April 6, 2020
In the Wizard of Oz, Dorothy says to her little dog, “Toto, I've a feeling we're not in Kansas anymore.” Today, many of us understand Dorothy’s trepidation and uncertainty better than ever before.
COVID-19 has changed our world in ways previously unimaginable. In many states, Americans shelter at home, venturing out for groceries, medicine, and other essentials. Parents have become teachers guiding online schoolwork, often while balancing...
Market Commentary, March 30, 2020
The United States set some records last week.
First, we became the epicenter of the COVID-19 pandemic. Popular Science explained:
“An increase of 15,000 known cases in just one day pushed the United States past Italy and China, making it the new epicenter of the pandemic…Experts suspect the actual number of U.S. cases is much higher than currently reported…the United States has tested a far lower percentage of its large population than other hard-hit countries.”
On Friday, March 27, the Centers for Disease Control (CDC) reported...
Market Commentary, March 23, 2020
The coronavirus (COVID-19) continued to spread across the United States last week.
On Friday, March 13, the Centers for Disease Control (CDC) reported there were 1,629 confirmed and presumptive cases and 41 deaths. Last Friday, March 20, the numbers had increased to 15,219 cases and 201 deaths.
Governments in several states – including California, Colorado, Connecticut, Florida, Georgia, Idaho,Illinois, Louisiana, Maine, New Jersey, and New York – have issued shelter-in-place orders that apply to the entire state or...
Market Commentary, March 16, 2020
Last week was one for the history books.
Mid-week, the World Health Organization (WHO) declared coronavirus a global pandemic. At the time, there were more than 118,000 cases in 114 countries, and the death toll exceeded 4,000 people. On Friday, the Centers for Disease Control (CDC) reported 46 states and the District of Columbia have been affected, so far. As of Friday, there have been 1,629...
Market Commentary, March 9, 2020
Last week, market volatility reached levels that make many investors uncomfortable.
On Monday, the Dow Jones Industrial Average surged higher, delivering its biggest one-day point gain in history. The catalyst may have been reports that ‘Group of Seven’ (G7) finance ministers and central bank governors were meeting via conference call on Tuesday. French Finance Minister Bruno Le Maire indicated the discussion would lead to coordinated monetary...
Market Commentary, March 2, 2020
Take a deep breath.
We have experienced downturns before. Think back to 2018. During the last quarter of the year, major stock indices in the Unites States suffered double-digit losses,
much of it during December. What happened next? By the end of 2019, those indices had reached new highs.
The reasons for, and performance following, market downturns varies. The key is not to panic....
Market Commentary, February 24, 2020
The coronavirus appears to have inspired two distinct schools of thought among investors.
Some investors currently favor opportunities that are considered lower risk, like Treasury bonds and gold, because they’re concerned about the potential impact of
the coronavirus on the global economy. Others are piling into higher risk assets, like stocks, that could benefit if central banks (like the United States Federal Reserve)...
Market Commentary, February 18, 2020
Many stock markets around the world moved higher last week. Investors’ optimism in the face of economic headwinds has confounded some in the financial services industry.
Laurence Fletcher and Jennifer Ablan of Financial Times cited several money managers who believe investors have become complacent. One theory is investors’ buy-the-dip mentality has become so firmly ingrained that any price drop is seen as a buying opportunity, regardless of share price valuation...
Market Commentary, February 10, 2020
Last week, major U.S. indices posted strong gains. That’s welcome news, but the drivers behind share price appreciation appear to have little to do with company fundamentals.
Fourth quarter earnings season is underway. During earnings season, companies let investors know how profitable they were during the previous quarter. With 45 percent of companies in the Standard & Poor’s 500 (S&P 500) Index reporting, earnings are slightly down. If the trend continues...
Market Commentary, February 3, 2020
Prepare yourself. There is a good chance markets will be volatile in the coming weeks.
Precautions designed to slow the spread of the Coronavirus may also slow Chinese economic growth and, by extension, global economic growth.
On Thursday, the World Health Organization declared the Coronavirus to be an international health emergency. The U.S. State Department issued a travel advisory for China...
Market Commentary, January 27, 2020
Markets hunkered down last week.
News of the coronavirus outbreak in Wuhan, China unsettled investors around the world. The respiratory infection is related to severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS), reported WebMD.
Previous virus outbreaks have affected global economic growth. Research into pandemic preparedness suggests...
Market Commentary, January 21, 2020
The new trade deals are here!
The United States and China signed a preliminary trade deal last week. The next day, the United States-Mexico-Canada Agreement was approved by the Senate.
The phase-one deal between the United States and China has been analyzed, applauded, disparaged, and questioned. Here is a sampling of what’s being said...
Market Commentary, January 13, 2020
It was a nerve-wracking week.
Iran fired 22 ballistic missiles at the Ain Al Asad air base near western Iraq and a second base in northern Iraq following last week’s U.S. drone strike that killed a top Iranian military commander. Newsweek reported the bases suffered minimal damage and...
Weekly Market Commentary, January 6, 2020
2019 was a remarkable year for investors with many asset classes delivering positive performance. Both the Standard & Poor’s 500 Index, a gauge of U.S. stock market performance, and the Dow Jones Global (ex U.S.) Index delivered double-digit increases (see the below table). Bonds and gold rallied, too, delivering...
Weekly Market Commentary, December 30, 2019
2019 will be a hard act to follow.
Investors may find themselves reluctant to ring out the old and ring in the new this week. During 2019, stock and bond markets delivered exceptional returns.
Ben Levisohn of Barron’s reported the Dow Jones Industrial Average was up 23 percent at the end of last week, the Standard & Poor’s (S&P) 500 Index...
Weekly Market Commentary, December 23, 2019
Let’s hear it for 2019!
Major stock indices in the United States and overseas are poised to deliver double-digit gains for the year. Even with uncertainty about Britain’s exit from the European Union (EU), the FTSE 100 boasted a gain of more than 10 percent at the end of last week. That’s not bad for a year which included (in the United States) an inverted yield curve, an earnings recession, and a contentious trade war.
Market Commentary, December 16, 2019
So, what comes next?
Last week was a good week for investors. Ben Levisohn of Barron’s explained:
“The Federal Reserve and European Central Bank both pledged to do what they could to underpin their respective economies. The United Kingdom gave Boris Johnson’s Conservative Party a landslide victory, virtually guaranteeing that the Brexit saga will....
Market Commentary, December 9, 2019
Ahh, the power of distraction.
On Friday, the unemployment report flashed its numbers like a hair model in a shampoo commercial. The Bureau of Labor Statistics reported 266,000 new jobs were created in November. That was better than expected even after deducting the 40,000-plus General Motors employees returning to work, reported CNBC.
Market Commentary, November 25, 2019
Thanksgiving is in the air!
On Thursday, U.S. investors may find themselves giving thanks for the bull market.
Year-to-date, the Standard & Poor’s 500 Index, Dow Jones Industrial Average, and Nasdaq Composite have all gained more than 20 percent with dividends reinvested. The MSCI World Index also is up 20 percent year-to-date.
Market Commentary, November 18, 2019
The longest bull market in history showed no signs of slowing last week.
U.S. stock markets climbed higher for the sixth week straight – the longest rally in U.S. markets in two years – and the Dow Jones Industrial Average surpassed 28,000 for the very first time, reported Bloomberg.
The Economist reported, “It has been a year of mood swings in financial markets. In the spring and summer, anxious investors piled into the safety of government bonds, driving yields down sharply.
Market Commentary, November 11, 2019
Last week, major United States stock indices finished at historic highs.
According to a source cited by Barron’s, U.S. stock markets are responsible for creating $6 trillion in paper wealth this year. ‘Paper’ wealth is when an asset is estimated to be worth a specific amount. The wealth becomes ‘real’ when the asset is sold.
Market Commentary, November 4, 2019
They did it.
The Federal Reserve lowered interest rates last week, as expected. There were no enthusiastic fans singing the Baby Shark song, but the Federal Open Market Committee’s decision was well received.
Reuters reported, “Gaps between market expectations and the Fed’s own outlook have been wide at times this year, a source of concern for policymakers who don’t want to kowtow to markets, but also don’t want to surprise or disrupt them.