In this week’s recap: the Federal Reserve stands pat on interest rates, key indicators show strength, and stocks end the week little changed.
Weekly Economic Update
Weekly Market Commentary | Presented by Sterling Wealth Advisors | May 6, 2019
THE WEEK ON WALL STREET
Stocks were up and down last week, and the three major benchmarks ended up little changed after five trading days. The S&P 500 rose 0.20% for the week; the Nasdaq Composite, 0.22%. The Dow Jones Industrial Average declined 0.14%.
The MSCI EAFE index, a benchmark for international stocks, declined 0.21%.1-2
The Fed Emphasizes Patience
The Federal Reserve held interest rates steady at its May meeting. Its May 1 policy statement noted “solid” job growth and economic activity, but only tame inflation pressure.
While the Fed was not expected to make a move, some investors wondered if its latest policy statement might hint at the possibility of a rate cut later this year. No such hint appeared. Fed chair Jerome Powell told the media Wednesday that “we don’t see a strong reason for moving in one direction or the other.”3
Indications of a Thriving Economy
Employers added 263,000 net new jobs in April. Economists polled by Bloomberg forecast a gain of 190,000. The jobless rate fell to 3.6% last month, the lowest in half a century.
This better-than-expected employment snapshot comes on the heels of a first-quarter GDP reading that surprised to the upside. In another bit of good news, personal spending rose an impressive 0.9% in March.4-5
Final Thought
On Wednesday and Thursday, stocks fell in the wake of the Fed policy statement. Friday, they more or less recouped their losses after the impressive April jobs report. Ups and downs like these come with the territory when you invest; the key is to stay patient and think long term instead of short term.
TIP OF THE WEEK
If you are young and want to make financial progress out of college, consider starting your career in a metro area where housing and living expenses are relatively low. Some of the most “exciting” cities to live and work in are also some of the priciest, with their millennial and Gen Y residents deeply in debt.
THE WEEK AHEAD: KEY ECONOMIC DATA
Friday: The April Consumer Price Index, monitoring monthly and annual inflation.
Source: Econoday / MarketWatch Calendar, May 3, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. Econoday Inc. is a technology and information company providing data and analysis for the financial industry, participants in the financial community, and individual investors. MarketWatch, a financial information website, is a subsidiary of Dow Jones & Company, a property of News Corp. 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 are also subject to revision. The release of data may be delayed without notice for a variety of reasons, including the shutdown of the government agency or change at the private institution that handles the material.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Occidental Petroleum (OXY), Tyson Foods (TSN)
Tuesday: Allergan (AGN), Anheuser-Busch (BUD), Lyft (LYFT)
Wednesday: Green Dot (GDOT), Hostess Brands (TWNK), Walt Disney Co. (DIS)
Thursday: AXA Equitable Holdings (EQH), Keurig Dr. Pepper (KDP), News Corp. (NWSA)
Friday: Enbridge (ENB), Marriott International (MAR), Viacom (VIA)
Source: Morningstar.com, May 3, 2019
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.
QUOTE OF THE WEEK
“Do not go where the path may lead, go instead where there is no path and leave a trail.”
RALPH WALDO EMERSON
THE WEEKLY RIDDLE
There are two friends: one always goes to sleep as the other wakes up, and vice versa. They never see one another. What are they?
LAST WEEK’S RIDDLE: It walks on four legs in the morning, two legs at noon, and three legs in the evening. What is it?
ANSWER: A human. A baby crawls on all fours, then walks on two legs as an adult, and uses two legs and a cane when old.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Sterling Wealth Advisors and Cambridge are not affiliated.
To learn more about Sterling Wealth Advisors, visit us on the web at www.sterlingwealthadvisorstx.com
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CITATIONS:
1 – markets.wsj.com/usoverview [5/3/19]
2 – quotes.wsj.com/index/XX/990300/historical-prices [5/3/19]
3 – bankrate.com/banking/federal-reserve/fomc-meeting-recap-april-may-2019 [5/1/19]
4 – nytimes.com/2019/05/03/business/economy/jobs-report-april.html [5/3/19]
5 – marketwatch.com/tools/calendars/economic [5/3/19]
CHART CITATIONS:
markets.wsj.com/usoverview [5/3/19]
quotes.wsj.com/index/SPX/historical-prices [5/3/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/3/19]