In this week’s recap: the S&P 500 and Nasdaq Composite outperform the Dow Industrials, earnings season gets underway, and retail sales retreat for the first time since winter.
Weekly Economic Update
Presented by John J. Barrios, CFP®, October 21, 2019
THE WEEK ON WALL STREET
Earnings helped give the Nasdaq Composite and S&P 500 a slight lift last week, offsetting investor disappointment over the small scope of the preliminary U.S.-China trade deal reached on October 11. Blue chips took a small weekly loss.
The Nasdaq and S&P respectively gained 0.40% and 0.54% on the week. The Dow Jones Industrial Average retreated just 0.17%. Outdoing these three benchmarks, the MSCI EAFE index tracking stocks in developed overseas markets rose 1.35%.1,2
The Early Earnings Picture
According to stock market analytics firm FactSet, 15% of S&P 500 companies had reported results through Friday’s close. Of those companies, 84% announced that net profits topping projections, and 64% said that revenues had exceeded forecasts.
One big question is whether overall earnings for S&P 500 firms will show year-over-year growth. There was no year-over-year earnings gain evident in either Q1 or Q2.3
Retail Sales Declined Last Month
Shoppers scaled back their purchases in September. The Census Bureau announced a 0.3% dip for retail sales, the first decrease in seven months.
Auto sales can influence this number, and car and truck buying fell 0.9% last month. A fall pickup in that category may help encourage another monthly advance.4
If you buy your own health coverage, note that the open enrollment period for 2020 health insurance plans begins on November 1 in most states. The open enrollment window closes on December 15.5
T I P O F T H E W E E K
There are three distinct incentives to keep working in your sixties. One, your employer most likely offers you private health insurance and other medical benefits. Two, you can keep contributing to your retirement plan at work. Three, if you wait to claim Social Security at full retirement age, you will receive 100% of your monthly retirement benefit rather than a reduced amount.
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The National Association of Realtors publishes a report on September existing home sales.
Thursday: A report on September new home sales arrives from the Census Bureau.
Friday: The University of Michigan’s final October Consumer Sentiment Index appears, evaluating consumer confidence levels.
Source: Econoday, October 18, 2019
The Econoday 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: Celanese (CE), Halliburton (HAL), Sap (SAP), TD Ameritrade (AMTD)
Tuesday: McDonalds (MCD), Novartis (NVS), Procter & Gamble (PG), Texas Instruments (TXN)
Wednesday: Boeing (BA), Eli Lilly (LLY), Microsoft (MSFT), PayPal (PYPL)
Thursday: Amazon (AMZN), Comcast (CMCSA), Intel (INTC), Visa (V)
Friday: Anheuser-Busch (BUD), Verizon (VZ)
Source: Zacks.com, October 18, 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.
Q U O T E O F T H E W E E K
“There must be a beginning of any great matter, but the continuing unto the end until it be thoroughly finished yields the true glory.”
SIR FRANCIS DRAKE
T H E W E E K L Y R I D D L E
It falls from great heights, but it never stays, and sometimes people wish it would go away. What is it?
LAST WEEK’S RIDDLE: In terms of date and time, what was so significant about 3,661 seconds past midnight on January 1, 2001?
ANSWER: The time and date was 01:01:01 on 01/01/01.
John J. Barrios, CFP® may be reached at (901)850-2127 or firstname.lastname@example.org
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John Barrios is registered to offer securities through Woodbury Financial Services. Member FINRA & SIPC, and offer advisory services through First Heartland Consultants, Inc. Barrios Financial Services is not affiliated with Woodbury Financial Services.
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1 - wsj.com/market-data [10/18/19]
2 - quotes.wsj.com/index/XX/990300/historical-prices [10/18/19]
3 - insight.factset.com/sp-500-earnings-season-update-october-18-2019 [10/18/19]
4 - reuters.com/article/us-usa-economy-retail/weak-u-s-retail-sales-cast-gloom-over-economy-idUSKBN1WV1NG [10/16/19]
5 - businessinsider.com/what-is-open-enrollment-your-opportunity-to-buy-health-insurance [10/15/19]