May 28, 2019

The Week On Wall Street

Stocks drifted lower last week as investors considered the possibility that the world’s two largest economies might take some time to resolve key trade issues.

The S&P 500 retreated 1.17%; the Nasdaq Composite, 2.29%; the Dow Jones Industrial Average, 0.69%. The concern over trade was felt elsewhere: the overseas developed markets benchmark, the MSCI EAFE, also lost 1.41% in five trading sessions.1,2

Market Waits For Further Trade Talk Cues

A compromise on tariffs between the U.S. and China did not seem forthcoming last week. Negotiations appeared stalled. Regardless, President Trump and Chinese President Xi are slated to meet at June’s G20 summit in Japan.

The Department of Commerce has effectively banned U.S. companies from doing business with Chinese tech giant Huawei, a major global player in 5G technology. Some analysts think China may respond with retaliatory measures.3 

Leading Retailers Report Earnings

Big-box stores and other major retail chains announced first-quarter results last week. While some traditional department store chains disappointed (Kohl’s, JC Penney, Nordstrom), Macy’s recorded its sixth straight quarter of comparable sales growth. Target reported a 10.8% jump in earnings in the first quarter, Walmart announced Q1 gains in earnings and revenue, and Urban Outfitters saw record sales in Q1.4,5

Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance.

Final Thought

As new chapters in the U.S.-China trade drama continue to unfold, remember that your investment approach is built around your long-term objectives and risk tolerance. There will always be day-to-day price changes; there will always be breaking news alerts. The disciplined, long-term investor stays the course through the ups and downs.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Conference Board’s latest monthly consumer confidence index.

Friday: May consumer spending numbers and May’s final University of Michigan consumer sentiment index (another important measure of consumer confidence levels).

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Wednesday: Dick’s Sporting Goods (DKS), PVH (PVH)

Thursday: Costco (COST), Dell (DELL), Dollar General (DG), Ulta Beauty (ULTA)

Market Index Close May 24 Week % YTD %
DJIA 25,585.69 -0.69 +9.68
NASDAQ 7,637.01 -2.29 +15.10
S&P 500 2,826.06 -1.17 +12.73
Treasury Close May 24  Week % YTD %
10 Year Note 2.32 -0.07 -0.37

Sources: wsj.com, treasury.gov – 5/24/2019
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. Weekly and year-to-date market index returns are expressed as percentages. 10-year Treasury note yield = projected return on investment, expressed as a percentage, on the U.S. government’s 10-year bond. Weekly and year-to-date 10-year Treasury note yield differences are expressed in basis points.

Weekly Tip

Young adults can potentially see significant auto insurance savings if their parents include them on their policy.

That is permissible as long as the younger driver is under a certain age and either still living at home or living on a college campus.


Citations
  1. wsj.com/market-data
  2. quotes.wsj.com/index/XX/990300/historical-prices
  3. cnbc.com/2019/05/21/tech-stocks-are-feeling-the-pain-but-may-emerge-better-off-after-trade-war.html
  4. seekingalpha.com/article/4265991-q1-2019-u-s-retail-scorecard-may-21-update
  5. just-style.com/news/us-q1-in-brief-ross-stores-l-brands-target-corp_id135965.aspx

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