Telemus Weekly Market Review January 28th - February 1st, 2019
January 28 – February 1 Week in Review
The markets overcame a sluggish start to the week last week to finish on a higher note with earnings coming in better than feared and a dovish sounding Federal Reserve easing investor worry. The S&P 500 gained 1.57%, its best January since 1987, the Dow Jones Industrial Average gained 1.32%, the Nasdaq Composite gained 1.38%, and the Russell 2000 gained 1.29%.
The S&P 500 energy, real estate, consumer staples, and industrial sectors led last week's advance. On the other hand, the consumer discretionary, financials, and materials sectors underperformed.
What proved to be a real rallying cry for the market last week was the Fed. In particular, the idea that the Fed has pivoted from being a foe of the market to a friend with its monetary policy outlook sparked broad buying interest and allowed the S&P 500 to break above its 2700 level for the first time since December 7th.
Specifically, the Federal Open Market Committee and Fed Chair Powell on Wednesday indicated the Fed is content with being patient with its policy approach and is open to curtailing its balance sheet normalization effort if necessary.
Also, the FOMC voted unanimously to keep the fed funds target rate range unchanged at 2.25% to 2.50%, as expected.
Last week also saw the U.S. and China resuming trade talks in Washington and a host of corporate earnings reports that were generally mixed but were not as bad as anticipated.
Regarding earnings, Dow components Apple, Boeing, 3M, Pfizer, Exxon Mobil, Chevron, and Merck all pleased investors with their results while Caterpillar, Microsoft, Visa, DowDuPont, McDonald's, and Verizon underwhelmed.
In addition, widely owned Facebook and General Electric surged following their earnings reports, while Amazon fell on disappointing guidance although they beat their earnings estimates.
U.S. Treasuries saw increased buying interest following Wednesday's FOMC decision and Fed Chairman Powell's press conference. Treasuries pulled back on Friday, though, after a stronger than expected Employment Situation Report for January, which showed that nonfarm payrolls increased by 304,000. The 2 year yield finished the week down 11 basis points to 2.50%, and the 10 year yield fell nine basis points to 2.69%.
In other markets the U.S. Dollar Index fell 0.2% to 95.66 and WTI crude rose 3.0% to $55.28 a barrel.
February 4 – February 8 Economic Calendar
- Monday
- Factory Orders
10:00 AM ET - TD Ameritrade IMX
12:30 AM ET - Loretta Mester Speaks
7:30 AM ET
- Tuesday
- Redbook
8:55 AM ET - PMI Services Index
9:45 AM ET - ISM Non-Mfg Index
10:00 AM ET
- Wednesday
- MBA Mortgage Applications
7:00 AM ET - International Trade
8:30 AM ET - Productivity and Costs
8:30 AM ET - EIA Petroleum Status Report
10:30 AM ET - 10-Yr Note Auction
1:00 PM ET - Jerome Powell Speaks
7:00 PM ET
- Thursday
- Jobless Claims
8:30 AM ET - EIA Natural Gas Report
10:30 AM ET - Consumer Credit
3:00 PM ET - Fed Balance Sheet
4:30 PM ET - Money Supply
4:30 PM ET - James Bullard Speaks
7:30 PM ET
- Friday
- Baker-Hughes Rig Count
1:00 PM ET
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