Telemus Weekly Market Review April 22nd - 26th, 2019

April 22 – 26 Week in Review

It was another mixed week for the major indexes last week. The S&P 500, up 1.20%, the Nasdaq Composite, up 1.85%, and the Russell 2000, up 1.57%, each posted solid gains for the week and in the case of the S&P 500 and Nasdaq Composite setting new closing highs in the process. Good news on the U.S. economy and solid earnings reports from some mega-cap companies contributed to the week's results. The Dow Jones Industrial Average was the odd man out, declining 0.06%, following disappointing results and guidance from index members 3M, Intel, and Exxon Mobil.

U.S. economic data last week showed healthy pickups in new home sales and durable goods orders for March. The advance estimate for first quarter GDP also topped expectations, increasing a surprisingly strong 3.2%, while the GDP Price Deflator showed prices moderate more than expected.

Upbeat economic data, continued good news on inflation, and strong earnings results from mega-cap companies like Amazon, Facebook, and Microsoft helped contribute to gains in most sectors. The health care sector led the pace, bouncing back from the previous week’s decline. Weakness in 3M and UPS, meanwhile, contributed to the underperformance of the S&P 500 industrials sector, while poor results from Intel helped lead the Philadelphia Semiconductor Index lower. The S&P 500 energy sector also underperformed following disappointing news from Exxon Mobil and lower oil prices (see below).

The news from overseas unfortunately remains gloomy. 3M and Intel each called attention to a slowdown in demand from China while foreign economic data corroborated slowing growth expectations. South Korea's first quarter GDP contracted by 0.3%, and Germany's ifo Business Climate Index remained weak. The Bank of Japan also commented they expect rates to be kept at extremely low levels until at least the spring of 2020.

Oil prices started the week on a higher note after the U.S. decided to end its waivers for countries to import oil from Iran. Prices fell on Friday following President Trump telling OPEC to keep fuel costs down. For the week prices fell almost 2%, closing at $62.80 in Nymex trading.

U.S. Treasuries finished driven by muted inflation data and a dovish monetary policy from central banks. The 2 year yield declined 11 basis points to 2.27%, and the 10 year yield declined five basis points to 2.51%, resulting in a slight steepening of the yield curve.

In other markets the U.S. Dollar Index rose 0.6% to 98.03 last week.

April 29 – May 3 Economic Calendar