Weekly Market Review - January 24, 2019

Weekly Market Review - January 24, 2019

by cehassinger on Jan 24, 2019

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

"We live in a world defined by the rapid pace of technological change." Jerome Powell

Weekly look back:
  1. Equity markets have rebounded during the first few weeks of January recouping some of the losses that were suffered in Q4 2018.  Bank earnings propelled stocks higher last week.
  2. Sentiment is one of the most watched forward looking macro indicators and it fell last week as people started to worry about all the geopolitical events that need to be resolved over the short term including: US Gov't shutdown, US debt ceiling raised, Brexit, and China / US Trade talks.
  3. The Federal Reserve has a dual mandate of strong labor market and steady inflation.  Both of these seem to be under control, with Inflation dropping because of low oil prices and employment being strong according to the sturdy jobs report on January 4th.
Weekly look ahead:
  1. Housing was a weak part of the economy last year, which, at least partly, was attributable to last year's mortgage interest rate increases. Now, with the Fed suggesting a pause in interest rate rises, will housing rebound?
  2. The Government shutdown continues. As a result, many of the key macro data points will not be reported, including durable goods orders and retail sales last week.
  3. Central Banks are back in focus with the ECB and BOJ releasing interest rate decisions.  Keen focus will be on Central Banks, including the US Federal Reserve, as they enter a difficult transition from QE to QT.
World Macro highlights for this week: 

Tuesday: Existing Home Sales, Bank of Japan (BOJ) Announcement
Thursday: ECB Announcement, Leading Indicators
Friday: New Home Sales, Durable Goods Orders

2018 Yearly Index Returns as of 1/18/2019

S&P 500 

6.54%

Europe Equity

4.00%

Emerging Equity

6.48%

US 10 Yr

+.10 bp

US Small Cap Stocks

10.08%

 

Graph Of The Week

Mortgage rates continued to move down, however, it was not soon enough to help this month's numbers.  Interesting that ,supply moved down by 10.9%.

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