Stocks Muted, Big Week Ahead

Weekly Commentary — January 28th, 2019

       For the first time in months, U.S. markets experienced little movement last week.[1] The Dow and NASDAQ did have their 5th week of gains in a row, but their increases were small: 0.12% and 0.11%, respectively. Meanwhile, the S&P 500 broke its 4-week winning streak with a 0.22% loss.[2] Internationally, the MSCI EAFE also posted modest returns, gaining 0.47% for the week.[3]

What topics were on investors’ minds?

Despite the relative lack of market drama last week, investors still had plenty to consider. For example, the following details emerged:

  • Conflicting messages came out on trade tension with China.
  • The International Monetary Fund (IMF) downgraded its forecast for global growth.
  • Corporate earnings season continued.[4]

In addition, the longest Federal government shutdown in history ended. After 35 days, the House and Senate voted unanimously to reopen the partially closed government. President Trump signed the bill, which includes funding through February 15.[5]

This week could provide far more action in the markets when a number of key details emerge.[6]

What’s ahead this week? 

These last days of January provide several noteworthy updates, including:

  • Federal Reserve Meeting: Most people expect that the Fed will not increase rates this week. However, many investors will be studying how the central bank describes its plans for 2019 and assessment of the economy’s strength.[7]
  • Corporate Earnings: This week, 126 S&P 500 companies will release their earnings data.[8] Major reports could help provide insight into everything from U.S. consumers to global industry.[9]
  • China Negotiations: Chinese Vice Premier Liu and his delegation are coming to Washington to conduct additional trade discussions.[10] As we have discussed for months, the ongoing tension is affecting markets as investors look for clarity on what may lie ahead.[11]

One data point we may not receive this week is the initial reading of 4thquarter 2018 Gross Domestic Product.[12] This report is one of many affected by the Federal government shutdown. Although the government has reopened, we have yet to receive the latest data on retail sales, new home sales, durable goods orders, and more.[13]

ECONOMIC CALENDAR*

Tuesday: Consumer Confidence

Wednesday: ADP Employment Report, GDP

Thursday: Jobless Claims

Friday: Motor Vehicle Sales, PMI Manufacturing Index, ISM Mfg Index, Construction Spending, Consumer Sentiment

*The Federal government shutdown may delay some data releases.

Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. 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.

 

“Happiness is found in the absence of expectation and a continuous focus on appreciation.”

 – Tony Robbins 

Watch Out for Tax Scams

Each year, thousands of taxpayers fall victim to phone and email phishing scams that are designed to obtain your personal information and/or your money. You could receive telephone calls offering sweepstakes, winnings, or tech support. These numbers can be blocked on most cell phones. Or you may receive emails claiming to be from the IRS (this is known as phishing when an illegitimate entity purports to represent a legitimate organization). Don’t open these emails or their attachments; they could contain a virus or other malware. Here’s a short list of scams and how to report them:

  • Crooks impersonating the IRS to obtain banking and other information
  • FBI-themed ransomware scam
  • Last-minute email scams
  • Fictitious “Federal Student Tax” scam targeting students and parents and demanding payment
  • Automated calls requesting tax payments in the form of iTunes or other gift cards
  • Pretending to be from the tax preparation industry

You can report IRS or Treasury-related fraudulent calls or emails to phishing@irs.gov.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tip adapted from IRS.gov[14]

 

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If you have any questions or would like to learn more about developing strategies to pursue a prosperous and safe future, contact me today at Derek.Merkler@Parsonex.com! You can also visit my website to learn about how I help our service members and veterans plan for and achieve financial independence.

My blog discusses a myriad of financial topics and challenges, book reviews, and commentary on current events in the financial world to benefit our military and veteran community.  I attempt to be as thorough as possible when examining each subject but can never account for every possible scenario.  Please remember to consult with your advisers for advice on your particular situation.  Thank you for reading!

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[1]https://www.bloomberg.com/news/articles/2019-01-25/u-s-stocks-in-no-man-s-land-after-first-sideways-week-of-2019

[2]http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US

http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US

http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO

https://www.reuters.com/article/us-usa-stocks/wall-street-advances-on-washington-temporary-shutdown-deal-idUSKCN1PJ1GK

[3]https://www.msci.com/end-of-day-data-search

[4]https://www.bloomberg.com/news/articles/2019-01-25/u-s-stocks-in-no-man-s-land-after-first-sideways-week-of-2019

[5]https://www.npr.org/2019/01/25/688414503/watch-live-trump-addresses-shutdown-from-white-house-rose-garden

[6]https://www.bloomberg.com/news/articles/2019-01-25/u-s-stocks-in-no-man-s-land-after-first-sideways-week-of-2019

[7]https://www.marketwatch.com/story/investors-brace-for-action-packed-trading-as-stocks-ride-into-the-eye-of-the-fed-storm-2019-01-26?dist=markets

[8]https://www.marketwatch.com/story/investors-brace-for-action-packed-trading-as-stocks-ride-into-the-eye-of-the-fed-storm-2019-01-26?dist=markets

[9]https://www.bloomberg.com/news/articles/2019-01-25/u-s-stocks-in-no-man-s-land-after-first-sideways-week-of-2019

[10]https://www.bloomberg.com/news/articles/2019-01-25/u-s-stocks-in-no-man-s-land-after-first-sideways-week-of-2019

[11]https://www.marketwatch.com/story/investors-brace-for-action-packed-trading-as-stocks-ride-into-the-eye-of-the-fed-storm-2019-01-26?dist=markets

[12]https://us.econoday.com/byshoweventfull.asp?fid=498816&cust=us&year=2019&lid=0&prev=/byweek.asp#top

[13]https://www.bloomberg.com/graphics/2019-shutdown-data-delay/

[14]https://www.irs.gov/newsroom/tax-scams-consumer-alerts

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