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THE WEEKLY ECONOMIC UPDATE
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QUOTE OF THE WEEK
"Confidence doesn't come out of nowhere. It's a result of something... hours and days and weeks and years of constant work and dedication."
ROGER STAUBACH
THE WEEK ON WALL STREET
Stocks drifted lower last week, weighed down by Federal Reserve Chairman Jerome Powell's unsettling comments on the economy and signs of renewed tensions with China.
The Dow Jones Industrial Average fell 2.65%, while the Standard & Poor's 500 retreated 2.26%. The Nasdaq Composite Index slipped 1.17% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, slid 3.66%.1,2,3
Stocks Pull Back
Stocks moved lower throughout most of last week on worries that the emerging economic reopening might accelerate the spread of COVID-19. Comments by Fed Chair Powell added to the downside pressure when he expressed concern about the path ahead for the U.S. economy.
The stock market managed to find some firmer footing, posting a strong gain on Thursday. Stocks rallied again on Friday, overcoming headlines that suggested a souring relationship with China and a report that showed U.S. retail sales had dropped 16.4% in April.4
Powell Speaks
Fed Chair Powell spoke last Wednesday and painted a somber economic outlook, remarking that "the path ahead is highly uncertain and subject to significant downside risks." He urged the White House and Congress to pass additional financial relief to help the economic recovery, adding that there was no plan on the Fed's part to cut the federal funds rate to below zero.5
Powell also referenced internal Fed research that found those least able to weather the current economic environment were most impacted, with nearly 40% of households making less than $40,000 per year having lost a job in
March.
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BY THE NUMBER$
BURIED WITHIN -
On page 1,066 of the 1,815-page HEROES Act is a provision that would allow cannabis businesses to maintain federal bank accounts, something not currently allowed (source: HEROES Act).
SOCIAL DISTANCING ALREADY -
35 million Americans live alone, i.e., 28% of the households in the United States have just a single person living in the house/apartment (source: Census Bureau).
GAMES -
The last time MLB played a shortened regular season that still included post-season play was 1981. After a players' strike that wiped out 52 games per team, the Dodgers won the '81 World Series (source: MLB)
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THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday:
Housing Starts.
Wednesday:
FOMC (Federal Open Market Committee) Minutes.
Thursday:
Jobless Claims. Existing Home Sales. Index of Leading Economic Indicators.
Source: Econoday, May 15, 2020
The Econoday 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.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday:
Baidu (BIDU)
.
Tuesday:
Walmart (WMT), Home Depot (HD).
Wednesday:
Kohls (KSS), Target (TGT), Lowes Cos. (LOW), Expedia Group (EXPE).
Thursday:
Nvidia (NVDA), TJX Cos. (TJX), Ross Stores (ROST), Intuit (INTU).
Friday:
Deere (DE), Alibaba Group (BABA), Pinduoduo (PDD).
Source: Zacks, May 15, 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.
THE WEEKLY RIDDLE
It has keys that open no locks. Yet it lets you enter and create spaces. What is it?
LAST WEEK'S RIDDLE: You buy 10 shrubs. How can you plant them in five rows with four in each row?
ANSWER: Draw a 5-pointed star. Plant one tree at each point and one tree where the sides intersect.
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Portfolio Advisory Council, LLC
A Registered Investment Advisory Since 1986
Investment advisory services offered through Portfolio Advisory Council, LLC, and an SEC Registered Investment Adviser.
We cannot accept trade orders through e-mail. Important letters, e-mail, or fax messages should be confirmed by calling 713.574.6015. This email service may not be monitored every day, or after normal business hours.
James W. Hamilton, CFS, AIF
713.574.6025
W. Thomas Sutton CFP(R), ChFC, CLU
713.574.6020
Philip B. Moran, MBA, ChFC, CFP(R), AIF
713.574.6030
John C. Husbands
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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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the "NYSE") and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions - the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. 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.
1 - The Wall Street Journal, May 15, 2020
2 - The Wall Street Journal, May 15, 2020
3 - The Wall Street Journal, May 15, 2020
4 - CNBC.com, May 15, 2020
5 - The Wall Street Journal, May 13, 2020
6 - The Wall Street Journal, May 13, 2020
7 -
Re
production Prohibited without Express Permission - Copyright © 2011 Michael A. Higley
CHART CITATIONS:
The Wall Street Journal, May 15, 2020
The Wall Street Journal, May 15, 2020
Treasury.gov, May 15, 2020
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