Global stock markets jumped last week, with the S&P 500 Index rising 4.5% for its biggest gain since late November 2018. Short positions were covered due to technicals that suggested stocks were oversold. This fueled some of the recent recovery, but much of the boost, in our opinion, came after hints of a more dovish turn in Federal Reserve policy. Click here to read more
Our Summer edition of Financial Edge 2019 is now available. This quarter we discuss the price you pay for ignoring fee adjustments, one of the great benefits of retirement plans for your employees, and a short version of our podcast that’s sure to peak your interest and encourage you to continue listening to our three part series on financial statements. Click here to read more.
U.S. equity markets fell more than 2% last week, one of the worst weekly performances in 2019. The breakdown in U.S./China trade negotiations, combined with President Trump’s announcement of new tariffs, ignited the mild sell-off. However, stocks plunged again on Monday morning amid continuing trade war concerns. China has retaliated with their own tariffs; 5%-25% on some $60 billion of U.S. goods. Investors are also expressing concerns over broader geopolitical tensions which is further dampening sentiment. Click here to read more…
As stock markets go, the first quarter of 2019 was a win all around. The S&P 500 experienced its best quarter overall since the third quarter of 2009, when the recovery out of the great recession was just getting underway. The index also had its best first quarter since 1998, which is reaching back to another bull market entirely. Click here to read more…
Home values affect much in the economy – especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade, sharply rising home prices boosted home equity, consequently, consumers had money to spend. Click here to read more.
Stocks closed mixed on Friday, but mostly recovered from early losses. The muted performance is attributable to fourth-quarter earnings, negotiations over a China trade deal and the insipid debt ceiling issues.
The 10-year Treasury yield closed Friday at 2.63%, down from 2.69% the prior week. Last week’s economic reports, which included some catch-ups from prior weeks as government agencies re-opened following the partial shutdown, were generally soft. Motor vehicle sales were reported at 17.5 million in December and 16.6 million annualized in January, with the latter showing a significant drop in light truck sales. Factory orders for November fell 0.6%, hurt by oil’s price drop late last year. The ISM non-manufacturing index for January was 56.7, down from the prior month and below the consensus, but still well into expansionary territory. The government shutdown has likely skewed some economic figures downward as both consumers and businesses paused their spending given uncertainty. Click here to read more…
Our winter edition of Financial Edge 2019 is now available. The latest on Walgreens/Aspen Dental, Practice Growth via Social Media and your new favorite recipe, Shrimp and Grits. Don’t forget to send us a photo of your creation to be featured on our website. Please share your feedback and requests on content for our next Financial Edge.
2019 Interest rates and inflation shouldn’t represent a serious roadblock to equities.
Economic and corporate earnings fundamentals have remained relatively positive over the past few months amid increasing volatility; many stocks have entered correction territory. Investor concerns have grown as a number of issues remain unclear; trade talks, oil price declines, strengthening (U.S.) dollar and unresolved monetary policy. The year 2018 is almost in the rear-view mirror, but significant events over the last 12 months will continue to shape economic outcomes.
On the whole, we think the global economy is expanding and reasonably solid, but recent trade conflict presents a significant and serious threat.
Check out our latest Dentists Financial Edge newsletter for 2018. This newsletter includes updates you’ll want to know about the Tax Reform, some insight on how to better your success rate in setting appointments, and maybe even your new favorite weekend recipe. Don’t forget to send us a photo of your creation to be featured on our website. Please share your feedback and requests on content for our next Financial Edge.
U.S. stocks ended the week slightly lower after reaching new all-time highs last week, with the S&P 500 Index dropping 0.5%. Materials, financials and consumer staples were among the biggest detractors, while telecom, health care and technology moved higher. U.S. Treasury prices and the dollar also advanced and oil prices ended the week up 3% amid growing concerns over tightening supply as a result of U.S. sanctions on exports from Iran.
Vicissitudes in the market should not come as a surprise, equity prices simply don’t move in linear fashion. However, we are entering the fourth quarter (when markets typically post the strongest returns of the year). In theory, investors can breathe a sigh of relief during this time of year. We are not postulating a linear move higher heading into year-end, but we have analyzed data collected on S&P 500 performance from 1980-2017. The way we see it, the final quarter of the year has generated average gains of 4.59%, compared to gains of 2.34%, 2.67% and 0.3% for 1Q, 2Q and 3Q, respectively.