Markets “In a Nutshell” for January 14, 2020

Markets “In a Nutshell” for January 14, 2020

Investment Week at a Glance

Stocks finished mostly up for the week.  The Dow Jones Industrial Average was up 0.66%, the S&P 500 rose 0.94%, the New York Stock Exchange Composite (2,000 stocks) rose 0.29% and the average investors index (Value Line Index) was down 0.29%.  Foreign stocks (DJ Global ex U.S.) were up 0.16 %.  Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 4 basis points higher at 1.76%.  (Data source: Wall Street Journal)

Stocks Continue Going Up

The U.S. stock market continued its move higher as tensions in the Middle East subsided for now after an Iranian missile strike on a U.S. military base seemed to be the last of any direct military conflict between the two countries. On Friday, the U.S. Labor department also released jobs data of 145,000 new jobs for the month of December, slightly below analyst estimates of about 160,000 jobs. While the report wasn’t nearly as strong as the blowout November report, it highlighted how the economy is continuing its persistent run of creating jobs and growing wages, even while by many estimates the country is at or, at the very least, near full employment. A continuation of this theme will support the narrative that the U.S. consumer can keep the economy out of a recession in the near future. (Barron’s)

4th Quarter Earnings Reports

The majority of 4th Quarter earnings reports begin to be released starting this week, starting with the largest banks highlighting their performance for the last three months of 2019. Earnings for the entire year of 2019 are estimated to be flat to slightly negative, in a year where the S&P 500 was up about 29%. This is largely because earnings in 2020 are expected to be up closer to 10%, putting a lot of pressure on the reports for this 4th quarter by many analysts to point to an optimistic year ahead. With a Phase 1 trade deal to be signed by the U.S. and China this week, along with a gradually recovering global manufacturing sector, markets have a good amount of optimism already priced into the market and it will be up to the next couple of quarters of earnings reports to justify much of that optimism. (Barron’s)

Quiz:

Which company became the largest car company ever in the U.S. last week with a market capitalization of $86 billion?

1. General Motors
2. Ford
3. Fiat Chrysler
4. Tesla

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

Answer to quiz:

    

      4.   Tesla became the largest car company ever in the U.S. last week. (Barron’s).