February 25 – March 1 Week in Review
The U.S. equity markets finished mixed last week. The S&P 500 and the Nasdaq finished higher, up 0.39% and 0.90% respectively, as shares of financial, technology and energy companies outperformed. The Dow Jones Industrial Average, down 0.02%, and the Russell 2000 down 0.03%, finished the week a touch lower.
There was a lot of news for the markets to digest, which included economic data, U.S-China trade updates, and geopolitics highlighted by the failed talks with North Korea. Several key economic indicators also helped tame buying interest last week, though.
Disappointing investors was the news December housing starts increased at the slowest pace since September 2016; the advance estimate of Q4 GDP increased 2.6% but was still below the growth registered in the second and third quarters; and the ISM Manufacturing Index for February decreased to 54.2 from January's reading of 56.6.
The positive news for investors last week, though, was that consumer confidence increased in February; moreover, the softer data could reinforce the Fed's "patient" stance on monetary policy.
In his semi-annual Congressional testimony Fed Chair Jerome Powell upheld that view on the economy last week. He also acknowledged the Fed is close to agreeing on a plan to end the balance sheet runoff.
In U.S-China trade news, President Trump officially delayed the March 1 deadline, as was anticipated, due to reported progress being made. Bloomberg reported Friday that the U.S. and China are in the process of preparing a document that lays out the provisions of a trade deal that could be signed perhaps as early as mid-March.
There were also some geopolitical developments that garnered some attention. President Trump abruptly ended a two day summit with North Korean leader Kim Jong-un, unable to reach an agreement on the denuclearization effort. Separately, Pakistan allegedly shot down two Indian fighter jets over their contested border but returned a captured Indian pilot in a goodwill gesture.
In earnings news, retailers had a pretty good showing last week. Macy's, AutoZone, Lowe's, TJX, Best Buy, Gap, and Foot Locker all climbed on better than expected results. Home Depot also had a solid fourth quarter but issued downside earnings guidance.
U.S. Treasuries declined noticeably in price last week, sending yields higher across the curve. The 2 year yield increased seven basis points to 2.55%, and the 10 year yield increased 10 basis points to 2.76%.
In other markets last week the U.S. Dollar Index lost 0.1% to finish at 96.46 and WTI crude lost 2.5% to close at $55.81 a barrel in Nymex trading.
March 4 – March 8 Economic Calendar