The commentary this week is somewhat brief as I am traveling. The remainder of the week I will have limited access to email and telephone. If you need anything, please contact the office and one of my colleagues will help you.
THE WEEK ON WALL STREET
The S&P 500 hit an all-time peak of 2,964.03, in intraday trading Friday, while improving 2.20% across five market days. The Dow Jones Industrial Average and Nasdaq Composite posted respective, 5-day advances of 2.41% and 3.01%. In addition, the MSCI EAFE benchmark of overseas stocks rose 2.58%. Keep in mind, while these numbers sound great, the markets are really just getting their head above where we were at the end of September 2018 due to the big 4thquarter selloff we saw.
A White House tweet and the latest monetary policy outlook from the Federal Reserve sent the bulls running. These were the top two financial news items in an eventful week – a week in which the value of West Texas Intermediate crude rose 9.4%, the price of gold went above $1,400 for the first time in six years, and the 10-year Treasury yield fell below 2%. (Treasury yields fall when their prices rise, and vice versa.)
THE FED’S JUNE POLICY STATEMENT
The central bank stood pat on interest rates this month, but the expectations of some of its policymakers changed. About half the 17 Fed officials who have a say in monetary policy now project either one or two quarter-point rate cuts by the end of the year. As recently as March, no Fed official saw grounds for a 2019 cut.
Markets interpreted this shift as a sign that the Fed might soon ease. While a rate cut is by no means a given, traders now believe that the Fed will make either a quarter-point or half-point cut at its July meeting.
LAST TUESDAY’S MARKET-MOVING TWEET
A day earlier, stocks rose after President Trump stated that he and Chinese President Xi Jinping “will be having an extended meeting” at this week’s G-20 summit in Japan. Investors were encouraged by this note, sensing a chance for progress in U.S.-China trade talks.
FINAL THOUGHT
With tensions persisting between Iran and the U.S., investors are keeping a close eye on both commodity prices and stock indices. Economic or geopolitical developments could heavily influence the short-term movement of the markets. In a market that seemingly trades "tweet to tweet," we want you to know we are here to serve you and are ever mindful of the trust you’ve placed in us. Have a great week! NICK TOADVINE These are the views of FMG Marketing Library, and not necessarily those of Nick Toadvine, or Calton Associates, Inc., and should not be construed as investment advice. Neither Nick Toadvine nor Calton & Associates, Inc. gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information. |
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June 24, 2019