Market Commentary, 02/11/2019

Stocks posted solid gains to start the week before pulling back on Thursday, leaving all three major indices with small weekly gains: the Dow up 0.2%, the Nasdaq added 0.5%, and the S&P 500 marked a 1.3 point increase (0.05%). This brings the Dow to seven weeks of consecutive gains.

The Nasdaq modestly outperformed the other major indices for the week and has recovered from its Christmas Eve low, gaining 19%. The index appears to have been fueled by potential trade negotiations and positive earnings reports.

Earnings for 2018 Q4 continue with 66% of companies in the S&P 500 reporting as of last Friday (02/08/19), with 71% reported earnings that beat expectations. The blended earnings growth rate, which combines actual results for companies that have reported and estimated results for those not yet reported, is up to 13.3% for the quarter.  (www.factset.com)

The US and China are resuming trade talks in Beijing next week, aiming to finalize a deal prior to the March 1 tariff deadline. On Thursday President Trump said he would not be able to personally meet with Chinese President Xi until after the March deadline, causing the market to dip lower. (www.envestnet.com)

The number of people applying for new unemployment benefits dropped by 19,000 last week to 234,000, keeping the total well below the 300,000 threshold economists use to indicate a “healthy” jobs market. (Source: Sherman Sheet)

The market continues to improve, primarily due to the strong US economy, higher than expected earnings, and reduced volatility following an intense December. The continued trade talks and the February 15 deadline for funding the government will hold the market’s attention this week.

Regards,

Jeremiah Patterson, CFP^®

Copelin Financial Advisors
514 Brooks Street
Sugar Land, TX 77478
Phone: 281 240-2902
Fax: 281 240-2856
jeremiah@copelinfinancial.com

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