Weekly Market Review - August 5, 2019

Weekly Market Review - August 5, 2019

by Chad Hassinger on Aug 8, 2019

By Bradley J. Rathe, AIF®
Chief Investment Officer

August 5, 2019

"If you want to conquer fear, don't sit home and think about it. Go out and get busy." Dale Carnegie

Weekly look back:
  1. The Fed cut rates by 25 basis points last week to 2.25%.  The market sold off because it expected a 50 basis points cut.  It is looking more and more likely that there will be between one and two more rate cuts by the Fed.  This would help to stabilize the economy.
  2. The US employment situation continues to be solid.  Jobs have been plentiful based on the 3.7% unemployment rate and wage growth has picked up at a 3.2% annual rate.
  3. Equity markets fell at the end of last week, as President Trump announced new tariffs on China that are to become effective September 1.
Weekly look ahead:
  1. Second Quarter earnings and revenue from S&P 500 companies reported slightly better than was expected.  Earnings were still negative but less than expected with anticipation for better numbers for the remainder of the year.
  2. The US ten year interest rate has moved  from 2.69% to 1.73% more than a 35% reduction in rates since the beginning of the year.  Moderate inflation data is supportive of continued low rates.
  3. Normally, August is a slower time for the markets, however this year looks to be different, as a result of the current rhetoric and with all the geopolitical risk events coming up over the next few months.
World Macro highlights for this week: 

Monday: ISM Services, PMI Services
Thursday: Fed Balance Sheet
Friday: PPI (Producer Inflation)

2019 Yearly Index Returns as of 8/2/2019

S&P 500 

18.2%

Europe Equity

12.49%

Emerging Equity

7.53%

US 10 Yr

-.81 bp

US Small Cap Stocks

14.66%

 

Graph Of The Week

Markets go up and down on news flow and currently the news flow has been negative. The real economy continues to hum along at a sustainable, moderate pace. 

Unless otherwise expressly indicated, the opinions or views expressed in this article are the author's own and do not reflect, and may differ from, the opinions or views of Strategic Financial Group, LLC or others within Strategic Financial Group, LLC, including its officers, managers, owners, employees or other service providers.