|The Week on Wall Street
Last week, traders paid close attention to coronavirus developments and earnings last week, while wondering how the former might eventually impact the latter. Concern over updated infection numbers moderated risk appetite. While markets calmed late in the week that all changed yesterday when the equity markets showed their biggest one-day decline since February 2018. Today markets opened positive only to slide another 1,5% later in the morning. So, you may be wondering how concerned you should be about your investments. Most of our clients are invested in a broad range of stocks and bonds and haven’t experienced losses like yesterday’s decline. From a bigger picture perspective, history has shown that health concerns like the Coronavirus have generally not had lasting impacts on stock markets and have often rallied back quickly. While the Coronavirus is serious and we don’t minimize the deaths and suffering that has occurred, from a pure investment standpoint we believe that once the virus is more contained that markets will recover and reach new highs. But we do believe that there could be more volatility in the meantime. We are watching these events and believe the risk controls we already have in place should help weather this challenging time. If you have questions or concerns don’t hesitate to call us.
Minutes from the Federal Reserve’s January Meeting
Last month, members of the Federal Open Market Committee felt the near-term outlook for the economy had improved slightly since the last Fed meeting in December. The minutes did note that the COVID-19 coronavirus outbreak “warranted close watching.”
Some analysts have wondered, if the coronavirus threat heightens whether the Fed might cut short-term interest rates this year. The FOMC voted 11-0 in January to leave rates alone.[i]
Fewer Home Sales, But More Building Permits
Sales of existing homes weakened 1.3% in January, according to a new National Association of Realtors report. On the new home front, the Census Bureau said that the rate of permits for new residential construction neared a 13-year high last month.[ii],[iii]
At Friday’s closing bell, gold was worth $1,646.60 on the New York Mercantile Exchange. Gold futures traded at a seven-year peak on Friday morning.[iv]
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Conference Board’s monthly Consumer Confidence Index.
Wednesday: A January new home buying report from the Census Bureau.
Thursday: The second estimate of fourth-quarter economic growth from the Bureau of Economic Analysis.
Friday: January consumer spending numbers from the Department of Commerce, and the final February Consumer Sentiment Index from the University of Michigan (an assessment of consumer confidence levels).
Source: MarketWatch, February 21, 2020
The MarketWatch economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: HP (HPQ), Intuit (INTU), Palo Alto Networks (PANW)
Tuesday: Home Depot (HD), Public Storage (PSA), Salesforce (CRM)
Wednesday: Booking Holdings (BKNG), Lowe’s (LOW), TJX Companies (TJX)
Thursday: Anheuser-Busch Inbev (BUD), Baidu (BIDU), Best Buy (BBY), Dell Technologies (DELL)
Friday: Dollar Tree (DLTR)
Source: MarketWatch, Market Insider, February 21, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
|Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.|
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