The bulls are still in charge. As we zero in on a ten-year run, some pundits are predicting an end to the market’s further upside. However, since bull markets don’t die of old age, but rather weakening economic conditions, it appears that there is still room to go higher for now. The S&P 500 is within 1.3% of its high mark set in September of last year and the Dow Industrial Average is about 350 points from its all-time high. For the week, investors had another nice ride with the Dow and S&P 500 up about 2%. The tech-heavy Nasdaq gained 2.7%, as technology names were higher by nearly 3%. The clear winner over the past five trading session were basic material stocks with a gain of 4.6%, as world-wide trade progress continues to chug along. Energy stocks were also strong as crude oil prices continue to settle higher. Except for a small decline in utilities, all sectors were positive on the week.
March saw a nice bounce in jobs, adding 196,000, which improved trader’s views on the economy along with continued low inflation. Manufacturing also picked up in China and was slightly higher in the U.S., while Germany’s numbers brought down Europe. There are still some headwinds to contend with, however. On the radar are downward revisions to GDP growth; a dour retail spending environment; and further slippage in U.S. auto sales. Hence, the Federal Reserve is on hold for now and there are some suggestions that if the economy begins to slow, we may see an interest rate reduction later this year.
With the first quarter of 2019 in the rear-view mirror, we embark on earning’s season one again. Wednesday we get results from Delta Air Lines, which had strong passenger traffic in March and consensus estimates for the airline are at $0.89 vs. $0.74 last year. On Friday, JPMorgan Chase will report first quarter results with a $2.36 Street view compared with $2.26 a year ago. With earnings predicted to be positive on average; an accommodative Federal Reserve; and hopes on resolving trade issues with China, there is reason for investor optimism – even in a slowing economy.
Here is the answer to last week’s trivia question: Ontario-based Blackberry Ltd. develops and manufactures wireless hand-held devices and provides enterprise related services to customers. The company was originally named? TCL Communications, Palm Corp., PDA of North America or Research in Motion. Answer: Research in Motion (RIM), which changed its name in February 2013 to its namesake Blackberry.
Today’s Trivia Question: Saudi Arabia’s state-owned oil giant – Saudi Aramco – is planning on an initial public stock offering. In a recent bond prospectus, it revealed for the first time its annual earnings. For 2018, the company is said to have earned? $80 billion, $111 billion, $125 billion or $132 billion.