Stocks Slip for Second Week – Weekly Update

April 17, 2017 | By Steven DiGregorio

Last week, major indexes experienced losses for the second week in a row, with the S&P 500 falling 1.21%, the Dow giving back 1.01%, the NASDAQ dropping 1.26%, and the MSCI EAFE declining 0.14%.

Markets closed on April 14 for the Good Friday holiday, but in the four trading days, a number of headlines dominated the news cycles:

• International tensions surrounding Syria and North Korea continued to heighten.
• The U.S. dropped its biggest non-nuclear bomb in Afghanistan.
• United Airlines lost $250 million in market value on Tuesday after footage emerged of a passenger’s violent removal from an overbooked flight.

These headlines drew great attention last week, and we will continue to follow events as they develop. Meanwhile, we want to focus on newly released data from last week that gives perspectives on where the economy is today—and what we should watch for in the coming months. In a nutshell, the reports hinted at relatively slow growth in the first quarter of 2017.

Inflation and Spending Dropped

The producer price index, which measures price changes for producers of goods and services, missed expectations and fell 0.1% in March.

The consumer price index, which measures price changes in a group of goods and services consumers purchase, fell 0.3%—much more than predicted.

Retail sales declined 0.2% in March, the second monthly drop in a row.

Consumer Sentiment and Jobless Claims Were Positive

· The April Consumer Sentiment Index readings beat expectations, revealing people’s assessment of current economic conditions being near the all-time high.

· Jobless claims came in well below expectations to show fewer people filing first-time unemployment claims—indicating a strong labor market.

Analyzed together, this new data could indicate that the Federal Reserve will be less likely to raise rates in June. However, we still have two more months of data and market performance until that meeting, and much can change in that time. Consumer spending accounts for approximately 70% of the total economy. Thus, high consumer sentiment and a tightening labor market—coupled with delayed income-tax returns—could help the economy pick up in the coming months.

Right now, we are in the thick of quarterly earnings season. Last Thursday, we saw J.P. Morgan Chase and Citigroup exceed their earnings estimates and still lose value in their shares that day. Determining whether this investor response is industry specific or indicative of other sentiment changes will be a key detail to examine in the coming weeks. The forthcoming reports will give key insights into the health of corporate America—and the market’s reaction to the companies’ performance.

We will continue to watch political and market developments and how they affect our overall economy. In the meantime, we encourage you to keep a focus on your long-term goals and the strategies that can help support your financial life.

ECONOMIC CALENDAR
Monday: Housing Market Index
Tuesday: Housing Starts, Industrial Production
Wednesday: Beige Book
Friday: Existing Home Sales

 

The content of this article is for informational purposes only and is not intended as an offer of investment advice, investment strategy or to buy, transfer or sell any security or other investment vehicle. Information contained herein has been obtained from sources deemed reliable but Spire Wealth Management LLC, Spire Securities LLC and their affiliates, including Compass Asset Management Group LLC, do not guarantee its accuracy. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions of Spire Wealth Management LLC, Spire Securities LLC or its affiliates.

Spire Wealth Management LLC is a federally Registered Investment Advisor. Securities offered through an affiliate, Spire Securities LLC. Member FINRA/SIPC.

By accessing any links contained in this article you will be leaving Spire Wealth Management LLC & its affiliates and Compass Asset Management Group LLC websites and entering a website hosted by another party. Although Spire Wealth Management LLC & its affiliates and Compass Asset Management Group LLC have approved these as reliable partner sites, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of Spire Wealth Management LLC & its affiliates Compass Asset Management Group LLC websites. The other parties are solely responsible for the content of their websites. We encourage you to read and evaluate the privacy and security policies on the sites you are entering, which may be different than those of Spire Wealth Management LLC & its affiliates Compass Asset Management Group LLC.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.

The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

By clicking on these links, you will leave our server, as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

_________________________________________________________________________________________________________________

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

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

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

4) https://www.msci.com/end-of-day-data-search

5) http://finance.yahoo.com/news/stock-market-briefing-com-120042941.html

6) http://www.cnn.com/2017/04/14/world/moab-bomb-things-to-know/

7) http://money.cnn.com/2017/04/11/investing/united-airlines-stock-passenger-flight-video/index.html?iid=EL

8) http://www.reuters.com/article/us-usa-economy-idUSKBN17G0ZW

9) https://www.bls.gov/news.release/ppi.nr0.htm

10) http://wsj-us.econoday.com/byshoweventfull.asp?fid=477393&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

11) http://www.reuters.com/article/us-usa-economy-idUSKBN17G0ZW

12) http://finance.yahoo.com/news/stock-market-briefing-com-120042941.html

13) http://wsj-us.econoday.com/byshoweventfull.asp?fid=477441&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

14) https://www.bloomberg.com/news/articles/2017-04-14/falling-inflation-retail-sales-bolster-fed-s-go-slow-approach

15) https://www.bloomberg.com/news/articles/2017-04-14/falling-inflation-retail-sales-bolster-fed-s-go-slow-approach

16) http://www.cnbc.com/2017/04/13/despite-positive-earnings-bank-stocks-turn-negative.html

Steve Digregorio Headshot
STEVEN M DIGREGORIO is President of Compass Asset Management Group, LLC and an Investment Advisor Representative with Spire Wealth Management, LLC.
Connect with him on LinkedIn.
Back to Results | |