Author: Raffa Wealth Management

Raffa Wealth Management

Financial News and Portfolio Management Discussion through February 8th

Global stocks surged over the week on easing fears over the coronavirus.  The S&P 500 rose 3.2% hitting a new record high during the week and the Dow climbed 3.1% over the week.  Abroad, the FTSE All-World Ex-US surged 2.1% for the week.  The 10-year Treasury yield edged up to finish at 1.58% to 1.55%.  Oil prices continued to fall entering bear market territory ending the week at $50.32 a barrel.

Manufacturing unexpectedly improved in the US in January with the ISM manufacturing index moving back into expansion territory for the first time since July.

January factory surveys showed slower declines in output in Asia and Europe, however, the surveys were completed before coronavirus grew to impact global supply chains.

As part of its pledge to deliver on the purchase of US goods, China said it would cut tariffs on $75 billion worth of US goods in half from 10% to 5% and for other goods from 5% to 2.5%.

US hiring remained strong in January with 225,000 new hires.  Unemployment rose to 3.6% from 3.5%, but that was a result of more people entering the job market.  Wages also rose 3.1%, a slight increase from December.

Over half of S&P 500 firms have reported earnings to date and analysts project there will be modest earnings growth after multiple quarters of decline earnings.

Financial News and Portfolio Management Discussion through February 1st

Global stocks sank over the week on fears that the coronavirus will dent global growth.  The S&P 500 fell 2.1% and the Dow declined 2.5% over the week.  Abroad, the FTSE All-World Ex-US dropped 3.2% for the week.  The 10-year Treasury yield fell over the week falling from 1.83% to 1.55% as investors flocked to safe-haven investments.  Oil prices continued to drop on fears of weaker economic growth falling 4.9% over the week to finish at $51.56 a barrel.

The Fed made no changes to its benchmark interest rate at the conclusion of its January meeting stating they are “comfortable with (their) current policy stance.”

The US economy grew at a 2.1% pace in the fourth quarter resulting in a 2.3% pace for 2019.  The rate of growth is relatively in line with the levels seen since the current expansion began in 2009.

The Bank of England elected to keep its benchmark rate steady at its most recent meeting.

The UK finally exited the EU and entered into a transition period of at least 11 months where it will negotiate its formal relationship with the country bloc.

Business activity fell to its lowest point in roughly four years well below expectations.

 

Financial News and Portfolio Management Discussion through January 25th

Global stocks fell driven by fears of the coronavirus outbreak and its impact on global growth.  The S&P 500 dropped 1.0% and the Dow fell 1.2% over the week.  Abroad, the FTSE All-World Ex-US declined 1.1% for the week.  The 10-year Treasury yield eased over the week to end at 1.83%.  Oil prices plunged on fears of weaker economic growth dropping 7.5% over the week to finish at $54.19 a barrel.

Existing home sales hit their highest level of 2019 in December.

After their most recent meeting, the ECB said it would keep their benchmark interest rate steady and said there will likely be negative interest rates for some time.

A reading of business activity in the US posted a 10 month high in January.  Japan also saw an uptick, while Europe remained weak as a whole.  However, Germany did show signs of improvement.

70% of the 74 companies that have reported earnings to date have beaten expectations.

 

Financial News and Portfolio Management Discussion through January 18th

US stocks hit new record highs driven by earnings news, the signing of the partial trade agreement between the US and China and positive economic news.  The S&P 500 surged 2.0%, while the Dow climbed 1.8%.  Abroad, the FTSE All-World Ex-US rose 1.0% for the week.  The 10-year Treasury yield eased over the week to end at 1.83%.

Companies are projected to report a fourth-quarter earnings decline of 2.4% from a year earlier which would make it the 4th straight quarter of earnings declines.  Large banks have reported strong fourth-quarter earnings driving optimism early in earnings season.

Germany’s growth hit a six-year low in 2019 growing at 0.6% dragged down from weakness in the manufacturing sector.

The US and China signed the phase one deal which represents a truce in the two-year trade war, with roughly $370 billion in tariffs remain on Chinese goods.

Retail spending rose 0.3% in December and excluding autos and gas rose 0.5%, the best pace in five months.

In December the construction of new homes in the US rose to their highest level since 2006.

Chinese industrial production grew 6.9% in December outpacing estimates and posting the fastest expansion in nine months.  Economic growth eased to 6.1% in China for the year, but it was in line with expectations.

 

Financial News and Portfolio Management Discussion through January 11th

Global stocks gained over the week as tensions in the middle east appeared to ease.  The S&P 500 climbed 0.9%, while the Dow rose 0.7%.  Abroad, the FTSE All-World Ex-US rose 0.5% for the week.  The 10-year Treasury yield rose over the week to end at 1.86% as investors moved away from safe-haven investments.  Oil fell 6.4% over the week to finish at $59.04, after the easing of tensions.

US employers added jobs for a 10th straight year.  December payrolls increased 145,000, slightly below estimates, but the unemployment rate remained at 3.5%.  Wages gained only 2.9% from a year earlier their lowest annual gain since July 2018.