Market Commentary, 03/04/19

The major US indices finished the week mixed, with the Nasdaq up 0.9% and the S&P 500 gaining 0.4%. However, the Dow finished the week essentially unchanged declining just five points, unfortunately stopping its consecutive weekly gains at nine.

February proved to be another strong month with the Dow finishing up 3.7%, the Nasdaq increasing 3.4%, and the S&P 500 adding 3.0%. In fact the S&P’s cumulative two-month gain of 11.1% was the fastest early-year start for the market since 1991.

The US equity bull market is about to celebrate its 10th birthday, which started after the S&P 500 sank to its low point on March 9, 2009. Since then, the index has posted an annualized 17.7% total return. (Source: S&P Dow Jones Indices; 03/01/2019)

US economic growth slowed in the final three months of 2018, but not as much as most economists had expected. GDP grew at a 2.6% annual rate for Q4, marking a slowdown from the Q3’s 3.4% pace. The annual growth rate for 2018 came in at 2.9%, just missing the elusive 3% growth rate. Unless the government revises the rate upward, this will mark the 13^th consecutive year of “sub 3%” GDP. (Source: AXA; 03/04/2019)

US crude oil prices fell slightly for the week, but it has had a strong year-to-date rally. Oil prices have rallied around 25% over the first two months of the year—the best two-month stretch since 2016.

The US economy continues to get better year over year as American banks repossess less homes each year going back to 2015: 450,000 homes in 2015, 379,000 homes in 2016, 292,000 homes in 2017, and just 230,000 homes in 2018 (source: ATTOM Data Solutions; 03/01/2019).

In US economic news, construction on new houses sank to a two-year low in December. The biggest decline was in multi-unit dwellings, which fell 20% in December vs. a decline of 6.7% in single family homes. Analyst suspect the slump is temporary as building permits, which give an indication of future building, increased in December suggesting a likely increase in the spring. (Source: Sherman Sheet; 03/04/2019)

US and China appear to have entered the “final stages” of trade deal that could end this month. The expectation is that China would lower tariffs and other restrictions on American goods and the US would do the same. In addition, China would increase their purchases of American goods. (www.marketwatch.com; 03/04/2019)

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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