Market Commentary, 04/29/19

After staying just below record highs for the last two weeks, the S&P 500 and the NASDAQ finally broke through on Tuesday to eclipse records set seven months earlier, finishing the week +1.2% and +1.8%, respectively. The Dow, however, fell 16 points (0.06%) for the week and remained around 1% below its record high. (www.finance.yahoo.com; 04/29/2019)

A primary driver behind last week’s market increase was the annual growth rate for the first quarter was estimated at 3.2%, exceeding expectations of 2.2%. This marks the fastest gain in three years and is all the more impressive considering the concern that surrounded the Q1 outlook back in December.  At that time the Atlanta Fed’s GDP model projected just 0.5% growth for the quarter. (www.wsj.com; 04/26/2019)

In addition to the strong Q1 GDP numbers, a large proportion of companies are surpassing analysts’ revenue expectations, providing some lift for stocks. Nearly 80% of the S&P 500 companies that reported first-quarter results as of April 24 had exceeded expectations. (www.factset.com; 04/24/2019)

The Fed is not expected to change its patient approach to interest-rate policy despite the strong report.  Officials are likely to wait to see how the economy fares in the second quarter before making any decisions. The Fed is sorting through mixed signals from the economy; while inflation has recently remained tame, the GDP report indicates the economy may be regaining momentum. (Source: Sherman Sheet; 04/29/2019)

In addition to the positive Q1 GDP estimate and better than expected earnings, the US-China trade talks could be entering their final phase as negotiators are scheduled to meet in China this week, and then in DC the following 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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