An end of week rally lifted stocks for what otherwise was a rather colorless trading week. Dow components Walt Disney, Boeing and JPMorgan Chase led the average higher on Friday, offset by sharp declines in UnitedHealth Group and Chevron, which is embarking on a major acquisition. On peaked volume, the Dow was virtually flat for the week, but the S&P 500 and the Nasdaq managed a gain of about 0.5%. Most market sectors were positive led by financials and technology, but health care stocks took a beating closing out with a loss of 2.5% following a “Medicare for All” pitch by some Democratic presidential hopefuls.
Economic news has been mixed. Trade talks with China are moving along, but slower than Wall Street would like. And new rumblings from the Trump administration on tariffs on European imports did not sit well with investors. While the economy here at home continues to move slowly ahead, the European Union is grinding down to a point of negative growth, especially in Germany – Europe’s largest economy. The likely moderation in GDP expansion in the U.S. for the year and low inflation suggests that the Federal Reserve will stay patient and cautious on the interest-rate front, even to the point of possibly reducing borrowing costs later this year.
First-quarter earnings season, where the outlook is murky, owing to the economy’s hiccups earlier in the year, is about to take center stage. This week we will get results from more of the nation’s top banks and from blog candidates Johnson & Johnson, CSX Corp., Danaher and Schlumberger. The economy and the stock market remain in their respective comfort zones as traders stay on the sidelines waiting for either an ax to drop or some positive catalyst to get them into a buying mood. In all, this “wait and see” consolidation period is encouraging for investors, who should continue to emphasize quality issues with stable profit histories, growing dividends and well-defined business prospects as the bull market ages.
Here is the answer to last week’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. Answer: $111 billion, the world’s largest.
Today’s Trivia Question: OfficeMax, founded in 1988, is now a division of Office Depot, Inc. From 1991 through 1995, OfficeMax was a business unit of? JC Penny, Kinko’s, K-Mart or United Parcel Service.