Stocks continued to do well as we closed out the first month of the year. The Dow Industrials provided investors with a 327-point gain for the week or 1.3%. The S&P 500 and the Nasdaq Composite showed similar percentage gains, thanks in part to dovish comments from Federal Reserve Chair Jerome Powell. Earnings results from some bellwether names like Boeing, Exxon-Mobil and Chevron, helped the Dow and strong showings by Apple and Facebook lifted the tech-heavy Nasdaq. Oil prices inched up a bit, which moved the energy stocks higher by about 3% for the week – the best performing sector. Except for telecom stocks, all sectors had up arrows on the week. And gold prices settled above $1,300 for the first time since May of last year settling on Friday at $1,317.
The Fed held rates steady, as predicted, at the two-day FOMC meeting, but comments from Powell suggested that the central bank is done raising rates for now and will slow its balance sheet reduction program. Elsewhere in the economy, the news isn’t as sanguine. We have seen declines in some of the leading economic indicators, consumer confidence is trending lower and existing home sales are far from robust. In all, we may see just modest GDP growth this quarter – even if the government’s reopening proves long-term. And storm clouds are gathering offshore, viz: Economic growth continues to slow in China; trade disputes linger between that nation and the U.S.; Great Britain still needs to resolve its Brexit standoff; and there are emerging problems brewing in Venezuela.
Investors, however, remain resilient as Wall Street recently concluded its best January in decades. That comeback was particularly welcome after the market’s late-2018 collapse and various global headwinds. With a good start for the year, the durability of the market augers well for the future, assuming the economy can regain its footing. Earnings reports have been decent – but not great – and guidance has disappointed. This week we will hear from three aggressive portfolio names: Biotech giant Gilead Sciences, health information services provider Cerner and oil refiner Marathon Petroleum.
Here is the answer to last week’s trivia question: What international drug company identifies itself with this logo? Sanofi, Novartis, Bristol-Myers Squibb or AstraZeneca. Answer: Swiss-based Novartis.
Today’s Trivia Question: The major stock indexes in the U.S. are the S&P 500, Dow Jones Industrials and the Nasdaq Composite. Which country represents the KOPSI? South Africa, Kuwait, Kenya or South Korea.