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NOTE FROM PHIL...
Just a quick heads up for clients that I've been closely monitoring the markets and your accounts. Yesterday the market had a larger drop than usual and potentially sets up a short term bottom or close to it based on the heightened fear that also came with yesterday's move. Away from the news please remember that corrections (for any reason) are normal and this one has followed a similar pattern compared to corrections of the past. If you feel your risk tolerance has changed or your situation has changed since our last conversation please call me to discuss further. In the meantime try not to watch the news too much as they are focused on the short term (meaning hours) and are not concerned any bit with your longer term situation. We'll get thru this. Stay healthy and talk to you soon.
Phil
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the week on wall street
Heightened coronavirus fears, falling yields, and Super Tuesday primary results sent stocks on a rollercoaster ride of sharp price swings, leaving stocks marginally higher for the week.
The Dow Jones Industrial Average improved 1.79%; the S&P 500, 0.61%; the Nasdaq Composite, 0.10%. Outside the U.S., developed equity markets tracked by the MSCI EAFE Index rose 2.60%.1,2
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a swift fed decision
Wednesday morning, the Federal Reserve lowered its short-term interest rate by 0.5% to a range of 1.00%-1.25%, making its biggest cut since 2008. Addressing the media, Fed Chairman Jerome Powell said that the move was made to give the economy a "meaningful" lift and "help boost household and business confidence."
The question is whether reducing borrowing costs can effectively address growing business and consumer anxieties about shopping, traveling, and gathering.3
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The uncertainty on Wall Street has heightened demand for Treasury bonds. Their yields typically fall as their prices rise, and fall they did last week. The yield on the 10-year Treasury dipped under 0.70% during Friday's market day, an all-time low.
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WINTER HIRING SURGE CONTINUES
The Department of Labor's latest employment report showed companies adding 273,000 net new hires last month. Net monthly payroll growth has averaged 243,000 since December.
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The Fed's 50-basis-points cut in the federal funds rate has now shifted the sights of investors toward the European Central Bank, which is expected to make a policy announcement on March 12. The ECB has less room to maneuver than the Fed, since its key interest rate currently stands at -0.5%. Negative interest rates have done little to lift eurozone economies, which may necessitate more-creative monetary policy accommodation from the ECB's new president, Christine Lagarde.
Traders are also focused on whether the Federal Reserve will make another rate cut on March 18, when its next meeting concludes. The half-point rate cut this past week did little to soothe stock market concerns; opinions vary about what the central bank might choose to do next.6
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THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday:
The Census Bureau publishes a new Consumer Price Index, showing monthly and yearly inflation.
Friday:
The University of Michigan presents its initial Consumer Sentiment Index for March, measuring consumer confidence.
Source: MarketWatch, March 6, 2020
The MarketWatch economic calendar lists 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.
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THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday:
Thor Industries (THO)
Tuesday:
Dick's Sporting Goods (DKS)
Thursday:
Adobe (ADBE), Broadcom (AVGO), Dollar General (DG), Oracle (ORCL), Ulta Beauty (ULTA)
Source: Zacks.com, March 6, 2020
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.
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President
Wealth Advisor
phil@pmgwealth.com
George Maroudas
Wealth Management Coordinator
george@pmgwealth.com
Terry Maziarka
Client Service Manager
terry@pmgwealth.com
847.550.6100
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WEEKLY QUOTE
"You can get everything in life
you want if you will just help enough other people get what
they want."
Zig Ziglar
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WEEKLY TIP
If you owe money on the vehicle you drive and would be hard-pressed to replace it in the case of a bad accident, make sure that you have an auto insurance policy with comprehensive and collision coverage.
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WEEKLY RIDDLE
An man says that where he lives, 1,500 plus 20 and 1,600 minus 40 equal the same thing, and his neighbors and coworkers all agree. Where is he living?
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LAST WEEK'S RIDDLE
You see us reguarly, but never at the same time. We appear everywhere, but never in the same place. What are we?
ANSWER: Day and night.
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