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Market in a Minute: March 4-8, 2019

Monday, March 11, 2019

by Rich and Sheila Jamison

We’ve been told that it’s nice to know what happened last week, but so much going on that it’s hard to follow it all. Can we shorten the Market in a Minute to the top three (or something along those lines)? Rich’s first answer was, “What, do you actually want it in a minute?” Sheila’s reaction was, “Give people what they want!”

Beginning with this edition of Market in a Minute, we’re endeavoring to do just that. Fair warning though … Rich took a speed-reading course!

Executive Summary

Equities declined last week amid a confluence of below-par data, both economic and technical. Globally weakening economies overshadowed the bunch. The narrative was the market got ahead of itself by pricing in better results we’re getting. Nine of the 11 S&P 500 sectors ended lower, with energy, health care and industrials faring worst. Only utilities and real estate gained.

The US 10-year Treasury note yield fell to 2.63% from 2.76% (results of “flight-to-safety trade”). Crude oil slipped from $55.81 to $55.14/barrel. Volatility, according to the CBOE’s Volatility Index (VIX), rose to 16.1 from the prior week’s 13.6.

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Details

Domestically

Major economic disappointments included 1) growing concerns about the prospects for a US/China trade deal, 2) surprisingly weak government jobs report of only 20,000 new jobs, 3) the Fed’s March Beige Book showing 10 of the 12 districts projecting slight-to-moderate growth and 4) 2018 showing the widest annual goods trade deficit on record.

Discouraging technical indicators included the S&P 500's inability to stay above 2800 – a retest of its November high – and several indexes falling below their 200-day moving averages.

Globally

The Organization for Economic Cooperation and Development lowered its forecasts for the global economy to 3.3% in 2019 and 3.4% in 2020 (down 0.2% and 0.1%, respectively) saying that the global economy is suffering more than expected from political uncertainty and ongoing trade tensions.

The European Central Bank announced new measures to stimulate the Eurozone’s economy. It is the first major developed-country central bank to do so amid a softening global economy.

Brexit looms large with UK parliamentary votes this week. All options are up for grabs.

Chinese exports showed a sharp 20.7% year-over-year decline in February amid its economic slowdown and trade dispute with the US.


Sources:
The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; BBC News; The Associated Press; Reuters.com; Crain’s New York Business; MFS research; NYSE; NASDAQ; Dorsey-Wright Associates; NYMEX.com; CNBC’s Power Lunch & Squawk Box programs; Investing.com; Markit.com; the New York Times; Standardandpoors.com; Djindexes.com; 247wallstreet.com; MarketWatch.com; Morningstar.com; Thomsonreuters.com; the Financial Times.com; Briefing.com; BusinessWeek.com; Dol.gov; Fxstreet.com; Streetinsider.com; Ycharts.com;
 
The data above were taken from sources deemed reliable. However no guarantee can be made as to their completeness and accuracy.
Nothing in the above is meant to be, nor should it be construed as, investment advice or recommendations to buy or sell any security. Individual securities, whenever mentioned, are for illustrative purposes only and may not be relied upon as investment advice.
All indices are unmanaged and are not illustrative of any particular investment. A direct investment cannot be made in any index.
Tax and/or legal information contained herein is general in nature and for informational purposes only. It should not be relied upon as advice. Consult your tax professional or attorney regarding your unique situation.
Past performance is no guarantee of future results.

 

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