Stocks Gain, Reversing Losses from Prior Week; Bonds Gain
Good morning,
The Dow (+1.6%), NASDAQ (+2.1%), and S&P 500 (+1.7%) each exhibited strong gains for the week. Similarly, taxable bonds and tax-free municipal bonds gained about 0.5%. The 10-year Treasury yield fell 0.06% to a milestone rate of 4.00%, as this typically garners support if the yield falls below 4%.
Stocks rallied back on Monday following the sharp decline the prior Friday caused by trade war fears again with China. After Monday's rally back, the markets remained roughly even for the rest of the week. Due to the gov't shutdown, there was very little data reported last week, except for the Fed Beige Book, which summarizes economic conditions around the country. That report noted that tariffs were pushing prices higher across many locations, but the extent of the impact to consumers varied. Fed Chairman Powell also spoke last week and noted that the Fed is getting close to the point of stopping the reduction of its bond purchases. That statement was considered to be accommodative, so stocks and bonds rallied on that speech.
Earnings season kicked off with the large banks reporting earnings better than investors' expectations. More importantly, those same big banks also exhibited a notably positive tone in their reports. Many more corporate earnings will be reported this week as earnings season kicks off in full force. The government shutdown is now entering its 4th week. It's unclear if and what economic impacts it could have, but the effects will likely be felt by many consumers if that shutdown extends beyond 30 days.
Have a great day and terrific week!
Source: Yahoo Finance
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The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
