May 21, 2019
WEEKLY ECONOMIC UPDATE
THE WEEK ON WALL STREET

Stocks fell sharply at the start of last week over trade tensions, then recovered with help from strong earnings and indications that U.S.-China trade talks would continue. Even so, the major indices had a down week. The S&P 500 lost 0.76%, while the Nasdaq Composite fell 1.27%, and the Dow Jones Industrial Average declined 0.69%.
In contrast, the MSCI EAFE benchmark for international stocks rose 0.19%.1-2
The latest trade developments
 
A broad selloff occurred Monday after China announced it would respond to increased U.S. tariffs by boosting its own import taxes on $60 billion of U.S. products. Friday morning, the Street breathed a sigh of relief as the Trump administration decided to delay 25% tariffs planned for imported cars and car parts; they had been slated to take effect on May 18. Just hours later, President Trump announced an end to U.S. tariffs on metals coming from Canada and Mexico.
At midweek, Secretary of the Treasury Steven Mnuchin told reporters that he expected the U.S. to resume trade negotiations with China in "the near future."3-5 
Earnings season winds down

The first-quarter earnings scorecard is nearly complete, as more than 90% of S&P 500 companies have reported actual Q1 results.
Stock market analytics firm FactSet notes that 76% of these firms have beaten consensus earnings-per-share estimates. Overall earnings for S&P 500 components have surpassed expectations by 5.4%. Both of these percentages are above 5-year averages.6
Final Thought

The market is quite sensitive to trade developments at the moment, and it is unclear whether this will be a short-term trend or a long-term influence on prices. While the U.S. prepares its next moves, China is also preparing its response to any new U.S. tariffs, which could include manipulating its currency.
THE WEEK AHEAD: KEY ECONOMIC DATA
 
Tuesday: The April existing home sales report from the National Association of Realtors. 
Wednesday: Minutes from the Federal Reserve's May policy meeting.
Thursday: April new home sales figures from the Census Bureau.
Source: Econoday / MarketWatch Calendar, May 17, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: AutoZone (AZO), Home Depot (HD), Kohl's (KSS), Nordstrom (JWN)
Wednesday:  Analog Devices (ADI), Lowe's (LOW), Target (TGT)
Thursday:  Best Buy (BBY), Intuit (INTU), TD Bank (TD)
Friday: Foot Locker (FL)
Source: Morningstar.com, May 17, 2019.
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Phil Guerrero, CFP®
President
Wealth Advisor

Terry Maziarka
Client Service Manager

847.550.6100
WEEKLY QUOTE
 
"Every great mistake has a halfway moment, a split second when it can be recalled and perhaps remedied"
Pearl S. Buck 
WEEKLY TIP

A small, but growing, percentage of companies now offer student debt assistance as an employee benefit.  If you are looking for a new job and have outstanding education debt, research whether a potential employer can help you pay down your student loan balance. 
WEEKLY RIDDLE
 
Can you name two perennial vegetables?  (That is, vegetables that don't need to be replanted and can live on to produce in a future growing season?)
LAST WEEK'S RIDDLE:
 
Name three words in everyday English that begin with the letters "dw."   
ANSWER:  Any three of these five words will do: dwell, dwelling, dwarf, dweeb, and dwindle.
Know someone who could use information like this? 
Please feel free send us their contact information via phone or email.
(Don't worry - we'll request their permission before adding them to our mailing list.) 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
 
CITATIONS:
1 - wsj.com/market-data [5/17/19]
2 - quotes.wsj.com/index/XX/990300/historical-prices[5/17/19]
3 - reuters.com/article/us-usa-trade-china/tough-talk-from-china-leaves-trade-talks-with-u-s-in-limbo-idUSKCN1SN207 [5/17/19]
4 - marketwatch.com/story/mnuchin-says-he-expects-to-go-to-beijing-to-continue-trade-talks-in-the-near-future-2019-05-15 [5/15/19]
5 - npr.org/2019/05/17/724357441/u-s-to-lift-tariffs-on-canadas-and-mexico-s-steel-and-aluminum [5/17/19]
6 - insight.factset.com/market-punished-sp-500-companies-reporting-negative-eps-surprises-in-q1 [5/17/19]
 
CHART CITATIONS:
wsj.com/market-data [5/17/19]   
quotes.wsj.com/index/SPX/historical-prices [5/17/19] 
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [5/17/19] 
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/17/19]
 
Visit our website for more information www.pmgwealth.com