Weekly Market Review - July 17, 2019

Chad Hassinger |
Categories
Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

July 17, 2019

"May we think of freedom, not as the right to do as we please, but as the opportunity to do what is right." -Peter Marshall

Weekly look back:
  1. The stock market rally has continued to make new highs since the market swoon (sudden and widespread loss in the value of stocks) of May.  This week kicks off Q2 earnings season and expectations have ratcheted down as we have gotten closer with -3% on quarter over quarter earnings currently expected.
  2. Last week continued to show subdued inflation levels, with the PPI (Producer) showing 2.1% year over year growth and the CPI (Consumer) showing 2.1%, as well, with Energy prices pulling down the headline numbers.  These moderate inflation levels give the Fed some room to cut rates in the short term.
  3. The Federal Reserve balance sheet reduction program to reduce the overall Federal Reserve balance sheet concludes in September and currently looks like it will be put on hold.  Currently, the assets total $3.81 trillion, down $645 billion since the beginning of the program.
Weekly look ahead:
  1. The Fed meeting at the end of the month is the main driver of markets. Expectations are high that the FOMC will cut rates and give fresh stimulus to drive the economy higher.
  2. Retail Sales had a robust .4% gain last month, above the .1% expected. Surprisingly, in the report auto sales were strong at a .7% gain.
  3. Summer markets have started and we expect lower volatility over the next few weeks.
World Macro highlights for this week: 

Tuesday: Retail Sales, Import and Export Prices, Industrial Production
Wednesday: Housing Starts, Beige Book
Friday: Consumer Sentiment

2019 Yearly Index Returns as of 7/12/2019

S&P 500 

21.43%

Europe Equity

17.82%

Emerging Equity

13.17%

US 10 Yr

-.57 bp

US Small Cap Stocks

17.3%

 

Graph Of The Week

Even with the demise of Brick and Mortar stores retail sales have been relatively strong the past few months. 

 

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.