Once again, tariff-proof domestic utilities led the charge this week scoring a 2% gain and taking telecommunication stocks along for the ride, which moved up 1%. With a $5.57/bbl. gain in oil prices, energy shares were also higher by 1%. West Texas Crude settled at $74.15, a multi-year high and Brent crude closed at $79/bbl. However, the good news ends there. For the week, ongoing trade disputes and end-of-quarter window dressing sent stocks down again. The Dow lost over 309 points or 1.3% as did the more widely based S&P 500. A week technology sector brought the Nasdaq Composite Index lower by 2.4%.
Strong gains in housing starts and new home sales, a modest rise in the Leading Economic Indicators, and slight declines in sales of existing homes and consumer confidence – with both categories remaining at high levels – the domestic economy remains on solid footing. Overall, the latest trends suggest that the economy may have grown by as much as 4% in the second quarter. The next big issue is likely to be second quarter earnings season, which should be mostly positive with tax cut effects taking hold. However, persistent talk of trade wars with China, Europe and our neighbors to the north and south will continue to cause headwinds as we look toward the second half of the year.
Investors best stick with their long-term goals as the market continues to show resilience. A portfolio of high-quality stocks should do the trick, with a watchful eye out for possible geopolitical threats that may upset the apple cart. Markets will be closed on Wednesday in celebration of Independence Day, so enjoy the holiday.
Here is the answer to last week’s trivia question: As companies have market value (share price times the number of outstanding shares), so do company brands. At an estimated $182.8 billion, which company has the most valuable brand? Apple, Walt Disney, Coca-Cola or Amazon. Answer: According to Forbes – Apple is the number one brand for the eighth year in a row.
Today’s Trivia Question: Which is the largest publicly held corporation based in Idaho? Boise-Cascade, Micron Technology, Coeur Mining or Zion Bancorporation.