Recap: Q2 2019

Weekly Commentary — July 8th, 2019

The Week on Wall Street

U.S. stock benchmarks opened the new quarter positively. The S&P 500 gained 1.65% in the opening week of July; the Dow Jones Industrial Average, 1.21%; the Nasdaq Composite, 1.94%. Overseas, stocks in developed markets, tracked by MSCI’s EAFE index, rose 1.43%.[1],[2],[3],[4]

On July 3, the S&P posted its latest record close: 2,995.82. In other news, the Department of Labor said that the economy added 224,000 net new jobs in June, far more than the 160,000 projected by analysts in a Bloomberg poll. The headline jobless rate ticked up 0.1% to 3.7% in June; the U-6 rate, including the underemployed, also rose 0.1% to 7.2%. Finally, the Office of the U.S. Trade Representative said that the federal government plans to levy new tariffs on $4 billion of food and beverages coming from the European Union.[5],[6],[7]

Monday, July 15 will mark the start of the next earnings season. Money-center banks report first, followed by companies from a variety of industries. As Wall Street gets ready for their results, we will take a moment to recap Q2 index performance and the quarter’s two biggest news developments.

Stocks Rose, Fell, and Rose Again

The S&P 500 gained 3.93% in April, dropped 6.58% in May, and climbed 6.89% in June. In the end, it advanced 3.79% for the quarter, outdoing the Q2 gains of the Nasdaq Composite (3.58%) and Dow Industrials (2.59%).[8],[9]

The Fed Hinted at a Shift in Monetary Policy

The central bank’s June statement took out a reference about being “patient” on borrowing costs and noted that Fed policymakers would “act as appropriate” to try and sustain economic growth. The latest dot-plot, showing the opinions of Fed officials about where interest rates might be in the near future, showed nothing like consensus.[10]

U.S.-China Trade Talks Stalled, But May Resume Soon

In May, the U.S. and China announced they would hike tariffs on each other’s exports during the quarter. Formal trade negotiations broke down for six weeks. On June 29, President Trump announced at the Group of 20 summit in Japan that talks would soon resume and that the U.S. would hold off on tariffs slated for another $300 billion in Chinese goods.[11],[12]

What’s Next

As the quarter gets underway, traders are wondering if an interest rate adjustment and a U.S.-China trade deal are in store for the summer; there is also some ambiguity about the economy’s momentum. Investors will have plenty to consider in the coming weeks.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Federal Reserve Chairman Jerome Powell delivers opening remarks at a conference at the Federal Reserve Bank of Boston.

Wednesday: Fed Chair Powell testifies on monetary policy in Congress, andthe Fed also releases the minutes from its June meeting.

Thursday: The June Consumer Price Index appears, showing monthly and yearly changes in inflation.

Source: Econoday / MarketWatch Calendar, July 5, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: PepsiCo (PEP)

Wednesday: Bed Bath & Beyond (BBBY)

Thursday: Delta Air Lines (DAL), Fastenal (FAST)

Source: Zacks.com, July 5, 2019

 

“And so with the sunshine and the great bursts of leaves growing on the trees… I had that familiar conviction that life was beginning over again with the summer.” 

– F. Scott Fitzgerald, The Great Gatsby

 

 

How to Research Tax-Exempt Organizations

Not only does donating to a local charity or nonprofit feel good and help others, but your donations can also be a tax deduction. But before you donate, make sure you research the organization to see if it is, indeed, tax exempt.

The IRS makes it easy to check the status of various organizations to ensure that they are eligible to receive tax-deductible contributions. Their tool, Tax Exempt Organization Search, allows users to research an organization, quickly and easily, using information like the organization’s name, Employee Identification Number, and location.

In addition to finding out whether an organization is eligible to receive tax-deductible donations, users can also see automatically revoked organizations (which happens if they don’t file their required Form 990-series for three years in a row), IRS determination letters that recognize the organization as tax exempt, and more. Doing good for others, getting rid of things you no longer need, and being eligible for a tax deduction? Sign us up!

* 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 professional.

Tip adapted from IRS.gov[13]

Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues.  

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!

Advisory Services offered through Parsonex Advisory Services, Inc. 8310 S. Valley Highway, Ste. 110, Englewood, CO 80112 (303) 662-8700.


[1]https://quotes.wsj.com/index/DJIA/historical-prices

[2]https://quotes.wsj.com/index/COMP/historical-prices

[3]https://quotes.wsj.com/index/SPX/historical-prices

[4]https://quotes.wsj.com/index/XX/990300/historical-prices

[5]https://www.marketwatch.com/story/sp-500-heads-for-3rd-straight-record-ahead-of-private-sector-jobs-report-2019-07-03

[6]https://fortune.com/2019/07/05/us-hiring-jobs-data-rebounds/

[7]https://www.cnn.com/2019/07/02/economy/us-tariffs-on-eu/index.html

[8]https://money.cnn.com/data/markets/sandp/

[9]https://www.tradingview.com/markets/indices/quotes-us/

[10]https://www.bloomberg.com/news/articles/2019-06-19/fed-scraps-patient-rate-approach-in-prelude-to-potential-cut

[11]https://www.piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide

[12]https://www.bloomberg.com/news/articles/2019-06-29/xi-trump-agree-to-restart-trade-talks-china-says

[13]https://www.irs.gov/newsroom/tool-helps-donors-research-tax-exempt-organizations

 

Leave a Reply