Trade Winds Move the Market

Weekly Commentary — October 14th, 2019

The Week on Wall Street

Stock prices pushed higher last week, as investors remained hyper-focused on any new developments with the U.S. trade negotiations with China.

The Dow Jones Industrial Average picked up 0.91%, while the Standard & Poor’s 500 rose 0.62%. The Nasdaq Composite Index gained 0.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 2.28%.[1],[2],[3] 

Trade Winds

For nearly two years, investors’ moods have seemed to swing with each twist in the ongoing trade saga between the U.S. and China. Last week was no different.

On Tuesday, stock prices fell sharply on concerns that U.S.-China trade tensions had escalated. The White House announced the addition of 28 new Chinese companies to its list of firms that are banned from doing business in the U.S. Later in the day, White House officials confirmed that they had implemented travel bans on selected Chinese officials.[4],[5]

But prices bounced back Thursday and surged higher Friday on White House reports that suggested the trade talks between the two countries were “going really well.” Near the close Friday, the White House confirmed that the U.S. has come to a “very substantial phase one deal” with China.[6],[7]


Quarterly Earnings

Investors may start to get a better glimpse into third-quarter earnings this week, as more than 150 companies are expected to report on their operations.[8]

As “earnings season” gets underway, some attention may shift from the U.S.-China trade negotiations and toward company reports.

What’s Next

Some U.S. financial markets will be open, and some will be closed, on Monday, October 14, in observance of the federal holiday Columbus Day. The U.S. bonds markets and most banks will be closed. But the New York Stock Exchange and the NASDAQ will be open for regular hours.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: September Retail Sales are reported before the markets open.

Thursday: Housing Starts for September are released. A “start” is defined as the beginning of excavation of the foundation for the building. Philadelphia Fed Business Outlook Survey. The survey can provide insights into the manufacturing sector.
Source: Econoday, October 11, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Netflix (NFLX), Johnson & Johnson (JNJ), The Goldman Sachs Group (GS)

Wednesday: Abbott Laboratories (ABT), United Rentals (URI), Winnebago Industries (WGO)

Thursday: Morgan Stanley (MS), PayPal Holdings (PYPL), Intuitive Surgical (ISRG)

Friday: Coca-Cola (KO), Schlumberger Limited (SLB), American Express (AXP)

Source: Zacks, October 11, 2019

 

 

“Employ thy time well, if thou meanest to get leisure.”

– Benjamin Franklin

 

 

Do a Paycheck Checkup 

Every year, the IRS recommends doing what they call a “Paycheck Checkup.” This includes checking your withholding status to make sure enough taxes are being taken out of your paycheck. You should do a Paycheck Checkup at the beginning of the year, but it can be done in any season.

Check your withholding status if you have:

  • Gotten married or divorced
  • Had or adopted a child
  • Bought a house
  • Retired
  • Filed for bankruptcy
  • Got a new job or lost a job

The IRS also recommends checking on any streams of taxable income that are not subject to withholding, such as interest, dividends, capital gains, self-employment income, or IRA distributions. You should also check your withholding if you’ve experienced changes to your medical expenses, taxes, charitable gifts, education credits, dependent care expenses, and more. These life changes might affect your deductions or tax credits. These Paycheck Checkups will help make sure you’re in a good place when it’s time to file taxes.

* 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[9]

 

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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!

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[1] https://www.wsj.com/market-data

[2] https://www.wsj.com/market-data

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

[4] https://www.yahoo.com/news/1-u-imposes-visa-restrictions-195007427.html

[5] https://finance.yahoo.com/news/u-bans-travel-chinese-officials-185734111.html

[6] https://www.cnbc.com/2019/10/10/trump-says-china-trade-talks-are-going-very-well.html?&qsearchterm=really%20well%20trump

[7] https://www.cnbc.com/2019/10/11/trump-says-us-has-come-to-a-substantial-phase-one-deal-with-china.html

[8] https://www.zacks.com/earnings/earnings-calendar

[9] https://www.irs.gov/newsroom/all-taxpayers-should-check-their-withholding-asap

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