THE WEEK ON WALL STREET
As in February, investors spent most of the first full trading week of March hoping for new details in U.S.-China trade negotiations. While they waited, stock benchmarks drifted downward. From Monday’s open to Friday’s close, the S&P 500 lost 2.55%, while the Dow Industrials took a 2.66% fall, and the Nasdaq Composite weakened 3.12%. The MSCI EAFE index tracking developed markets outside the U.S. and Canada fell 1.09%.1,2,3,4
Why did stocks lose momentum? In a hint that global economic growth might be slowing, the European Central Bank abruptly reduced its 2019 Gross Domestic Product forecast for the eurozone from 1.7% to 1.1%. A disappointing reading on U.S. hiring also raised questions.5
Perplexing Jobs Data
According to the Department of Labor, the economy generated only 20,000 net new jobs in February. This was the smallest monthly gain since September 2017. Nevertheless, the unemployment rate fell to 3.8%, while underemployment declined sharply to 7.3%. (These decreases could reflect furloughed federal employees returning to work.) The average wage rose 3.4% in 12 months, the largest year-over-year increase in a decade.
Harsh winter weather may have impeded hiring last month, and February’s payroll growth could be revised in the Department of Labor’s April report.6
Earnings Season Recap
The fourth-quarter reporting season is all but over. FactSet notes that the S&P 500 has seen earnings growth of 13.4% in Q4, marking the fifth straight quarter with a double-digit rise.7
Stocks lost ground last week, breaking a long string of weekly advances. The extended rally partly reflected optimism that the U.S.-China trade dispute would soon be resolved, but a deal may or may not happen. The week offered a reminder that Wall Street sees both ups and downs. Day-to-day market fluctuations should not cause you to alter your long-term approach.
TIP OF THE WEEK
Do you have a health care Flexible Spending Account (FSA) at work? Check to see if it lets you carry over up to $500 of any unused balance remaining at the end of a plan year into the next year.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: January retail sales.
Tuesday: The Consumer Price Index, tracking monthly and yearly inflation.
Thursday: January new home sales and February retail sales.
Friday: The University of Michigan’s initial March consumer sentiment index, measuring consumer confidence.
Source: Econoday / MarketWatch Calendar, March 8, 2019
The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Dick’s Sporting Goods (DKS)
Wednesday: Smart & Final (SFS)
Thursday: Adobe Systems (ADBE), Broadcom (AVGO), Dollar General (DG)
Source: Morningstar.com, March 8, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
QUOTE OF THE WEEK
“The functions of intellect are insufficient without courage, love, friendship, compassion, and empathy.” – DEAN KOONTZ
THE WEEKLY RIDDLE
A mall parking lot has 1,000 parking spaces, and 40% of them are for compact cars. This morning, there are 200 compact cars and some standard-sized cars in the lot, which is 75% full. How many standard-sized cars are in the lot?
LAST WEEK’S RIDDLE:
How do you make the number 7 even?
Remove the S so “seven” becomes “even.”
Greg R. Solis, AIF®
President and CEO
Bob Medler, CRPC®, CMFC®, AIF®
Wealth Advisor / Investment Analyst
Tiffany Valentine, CFP®
CERTIFIED FINANCIAL PLANNER™
Vice President | Director of Financial Planning
78-075 Main Street
La Quinta, CA 92253
Office: (760) 771-3339
Fax: (760) 771-3181
The Wealth Advisors of Solis Wealth Management are also Registered Representatives with and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional
1 – quotes.wsj.com/index/SPX [3/8/19]
2 – quotes.wsj.com/index/DJIA [3/8/19]
3 – quotes.wsj.com/index/NASDAQ [3/8/19]
4 – quotes.wsj.com/index/XX/990300/historical-prices [3/8/19]
5 – cnbc.com/2019/03/07/stock-market-us-china-trade-jobless-claims-in-focus.html [3/7/19]
6 – usatoday.com/story/money/2019/03/08/jobs-report-just-20-000-added-february-economists-expected-181-000/3098383002/ [3/8/19]
7 – insight.factset.com/earnings-insight-q418-by-the-numbers-infographic [3/8/19]