Market Commentary 05/09/19

The market was flat last week following April’s 3.9% rise in the S&P 500, bringing the four month total to 17.5%. The Dow finished the month up 2.6% and the Nasdaq added 4.7%.

The Fed announced that they are going to remain patient, as expected, and kept the interest rates unchanged. They dismissed concerns that recent softness in inflation could indicate underlying weakness in the economy, and said they do not see a strong case for moving rates up or down. (www.federalreserve.gov; 05/01/2019)

Last Friday’s labor market report showed the economy generated 263,000 jobs in April—above most economists’ expectations, and more than the 12-month average monthly gain of 213,000. Additionally, the unemployment rate fell to 3.6% for April, the lowest it has been since December 1969. (Sherman Sheet; 05/06/2019)

Anxiety over the prospect of a deepening trade dispute between the US and China has weighed on markets this week after President Trump voiced frustration over the pace of talks in a Sunday tweet. Those fears were compounded Wednesday evening when the president accused the Chinese of negotiating in bad faith, and reneging on commitments made in previous rounds of negotiation. The Chinese responded that they would take unspecified action if necessary. (www.marketwatch.com; 05/09/2019)

Chinese Vice Premier Liu is scheduled to come to Washington today to continue the trade talks. It appears the big sticking point is whether China will agree to US demands for changes in Chinese law to implement the trade deal. China claims that would impinge on their sovereignty and take too long to implement, however, Beijing has made similar commitments in prior trade deals. (www.wsj.com; 05/09/2019)

Despite the trade negotiations and political posturing, it remains in the best interest of both nations to reach an agreement. On a positive note, the Dow was down as much as 449 points during the day, but closed the day down only 139 points, or just 0.54%. The reversal came on the heels of President Trump speculating that a deal could be done as early as 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

Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC. Advisory services offered through Investment Advisors, a division of ProEquities, and Harvest Investment Services, LLC, Registered Investment Advisors. Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.