If you weren’t on a sugar high the past few days, you may have missed the “action” on Wall Street. For the holiday-shortened week, the Dow drifted higher by 0.6%, but the S&P 500 and the Nasdaq Composite were all but flat on considerably lower-than-normal volume. On a sector-by-sector basis, technology stocks were able to provide some lift with a 1.2% advance along with some consumer-related names. On the downside, health care continued to fall out of favor with a nearly 4.6% loss, led by health insurers and pharmacy benefit management companies. But with the lack of any significant economic news, traders yawned.
Earnings season is in high gear, with early results providing some pleasant surprises. True, expectations had been lowered after what was probably an unimpressive first quarter for the economy, so anything above consensus estimates sent some stocks higher. Overall, first-quarter earnings will likely turn out decent for most companies, but likely fall short of the stellar gains posted in the first quarter of 2018, as the global economy did meet with some choppiness early this year. The economic outlook here at home has been ratcheted down of late with GDP growth now expected at 1.8% – 2.0% for the year. Stocks, however, may get a lift from a dovish Federal Reserve and a strong job market, but held in check by slowing global growth. News out of China, however, has been a bit positive, but Europe is still a negative.
This week we will get results from blog candidates Verizon Communications, 3M Co., Intel, United Parcel Service and Colgate-Palmolive, all expected to report flat to lower earnings from a year ago. For now, the bulls still have the upper hand. Equities have done quite well so far this year, and while there are risks after such a run, the fundamentals remain sufficiently strong for further, albeit slower, market gains ahead.
Enjoy the rest of the holiday weekend.
Here is the answer to last week’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. Answer: K-Mart.
Today’s Trivia Question: What company is the largest steel producer in North America? United States Steel, Worthington Industries, Nucor or Reliance Steel.