Market Commentary, 10/22/18

Last week:

Market volatility remained elevated, with the Dow gaining nearly 548 points on Tuesday and losing 327 points on Thursday. The Dow had intraday moves of at least 230 points every day, with a swing of over 450 points on Tuesday and Thursday. The final weekly result was a gain of 0.4% for the Dow, the S&P 500 was flat, and the NASDAQ finished down 0.6%.

The global markets were also turbulent, led by China’s economic growth falling to a 6.5% annual rate, its lowest level since Q1 2009. The primary Chinese stock market index has fallen 25% YTD. Additionally, there are concerns as the United Kingdom and the European Union try to resolve differences over the terms of Brexit. With five months left before the separation, it is possible that talks may collapse without any deal. (www.wsj.com)

Quarterly earnings season is entering its busiest stretch, and results of the biggest U.S. companies to date have largely exceeded expectations. With more than 17% of the companies in the S&P 500 Index having reported third-quarter numbers so far, 80% have reported net income that topped analysts’ forecasts. (www.factset.com)

In addition to the continued quarterly earnings reports, the Q3 gross domestic product (GDP) estimate is due Friday. The expectation is there will be a slight slowdown from the second quarter’s solid 4.2% annual rate (the Atlanta FED is projecting a rate of 3.9%). (www.frbatlanta.org)

Despite recent market volatility, the minutes from the latest Federal Reserve meeting confirms their expectation of continued economic growth through 2019. This positive report and earnings that are expected to outperform should bode well for the stock market over the coming months.

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 Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.