Market Commentary, 02/18/2019

The major US stock indices posted gains again last week on optimism that the US and China would reach a trade deal soon. The Dow finished the week up 3.1%, the Nasdaq added 2.4%, and the S&P 500 rose 2.5%. This marks the eighth consecutive week of growth for the Dow.

While we are recovering from the steep declines in December, it should be noted that since the low on December 24, the S&P 500 and Dow have both risen about 18%. The NASDAQ has added nearly 21%, exiting a bear market that it entered in late December.

Stocks fell on Thursday after the government reported that US retail sales fell in December at the fastest monthly pace since September 2009. December sales fell 1.2% on a seasonally adjusted basis relative to November; economists had expected a 0.1% increase, on average. However, these are preliminary numbers and they will be revised twice. (www.marketwatch.com; 02/15/2019)

Despite disappointing sales numbers, both the Dow and S&P 500 rose over 1% on Friday as the US and China appeared to make progress toward a resolution of their trade conflict. Negotiators met in Beijing, where they discussed a potential framework for a deal. Further talks are scheduled this week in Washington to discuss remaining sticking points. (www.wsj.com; 02/15/2019)

Of the 70% of S&P 500 companies that have reported 2018 Q4 results, earnings are up 16.8% on average. Earnings have exceeded expectations and projections in 62% of those companies. (Source: Thompson Reuters; 02/09/2019)

Congress managed to avoid another partial government shutdown when it approved a negotiated deal to keep the government funded through this fall. President Trump signed the bill on Friday, just before the deadline, while also declaring a national emergency over border security issues. This declaration appears to have been accepted by the stock market as the gains of the day not only held, but rallied into the close.

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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