Weekly Market Commentary
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.
Market Commentary, October 28, 2019
More money managers are feeling less bullish, but you sure couldn’t tell by the performance of U.S. stock markets last week.
So far, 2019 has been a tremendous year for U.S. stocks. Through the end of last week, the Standard & Poor’s 500 Index had gained more than 20 percent year-to-date, the Dow Jones Industrial Index was up more than 15 percent, and the Nasdaq Composite had risen more than 24 percent.
Market Commentary, August 26, 2019
Have you ever watched a lake in a thunderstorm?
Heavy rain pummels the surface. Dark clouds drop the sky closer to the water. Gusty winds crash waves ashore. Up top, on land, damage may occur. Underneath, in the deeper water, things often remain pretty much the same...
Market Commentary, August 19, 2019
Don’t let volatility get you down.
Last week was the 40th anniversary of BusinessWeek’s infamous cover headline: ‘The Death of Equities: How inflation is destroying the stock market.’ The publication’s current iteration, Bloomberg Businessweek, reported it is still getting grief over the headline and subsequent bull market. In its defense, stocks trended lower for about three years after the magazine hit newsstands...
Market Commentary, July 8, 2019
What will the Federal Reserve do now?
There was unexpected economic news last week. On Friday, the Bureau of Labor Statistics announced 224,000 new jobs were added in June, which was more than analysts had anticipated. The gains were offset a bit by reductions in April and May employment estimates. However, overall, the pace of jobs growth during second quarter was fairly consistent with jobs growth during the first quarter, reported Matthew Klein of Barron’s...
Market Commentary, July 1, 2019
In the infamous words of Mortimer Snerd, “Who’d a thunk it?”
After U.S. stocks dropped sharply during the last weeks of December 2018, investors were not optimistic about the future. Early in January 2019, the State Street Investor Confidence Index dropped to its lowest point since 2012, and the American Association of Individual Investors (AAII) Sentiment Survey showed just about 31.6 percent of investors as bullish. The long-term average for bullishness is 38.2 percent...
Market Commentary, June 24, 2019
Everything went up – and that’s unusual.
Randall Forsyth of Barron’s explained, “Like our major political parties, the stock and bond markets seem to live in two different worlds these days. The former sits at record levels, suggesting we live in the best of all possible worlds. The latter sees things as bad and only getting worse...”
Market Commentary, June 3, 2019
Just two weeks ago, the U.S. government lifted tariffs on Mexico and Canada. So, it was a surprise last week when President Trump tweeted the United States would impose an escalating tariff on all goods imported from Mexico until the flow of migrants to the United States’ southern border stops...
Market Commentary, May 28, 2019
U.S. stocks have had a great run.
During the past decade, the profitability of U.S. companies increased rapidly. Strong corporate earnings helped the U.S. stock market outperform markets in other nations by a significant margin. According to Capital Economics, “Since the start of this decade, the average annual return from the MSCI USA index of mid- and large-capitalization U.S. equities, which closely tracks the S&P 500, has been roughly 13 percent. This compares to only 7 percent...
Market Commentary, May 20, 2019
There was some good news on trade, last week. The United States took steps to reduce trade friction with the European Union, Canada, Mexico, and Japan.
The United States on Friday reached an agreement with Canada and Mexico to remove steel and aluminum tariffs, which had been a persistent source of friction across North America over the past year. The deal on metals came as Mr. Trump decided not to press ahead immediately with levies on EU and Japanese automotive products...
Market Commentary, May 13, 2019
Trade talk trouble took a toll last week.
Major U.S. stock indices moved lower when trade talks between the United States and China broke down. The Standard & Poor’s (S&P) 500 Index, Nasdaq Composite, and Dow Jones Industrial Index all finished the week down between 2 percent and 3 percent, reported Ben Levisohn of Barron’s...