Market Commentary Archives - Page 3 of 5 - Rocky Mountain Financial Solutions

Massive Earnings Week – Market Brief July 26, 2021

jim Financial advisor, Market Brief, Market Commentary, Market Outlook, Market Review, Stock Market July 26, 2021July 26, 2021financial advisor, market brief, Market Commentary, Market Outlook, Market Review, Stock Market

U.S. stocks shook off a Monday selloff sparked by coronavirus variant concerns to finish positive for the week. The Dow, S&P 500, and Nasdaq finished at all-time closing highs. Large-cap growth stocks lifted the Nasdaq Composite by nearly 3% and the S&P500 by 2%. Plenty of potential market-moving events this week, from tech earnings to the Fed meeting and key economic releases.

Last Week

On the positive side, continuing claims declined by 126,000 to a pandemic-era low of 3.24 million. Housing starts increased more than expected in June, despite labor and land shortages which are weighing on homebuilder confidence. Existing home sales rose 1.4% in June after 4 straight months of decline. The median price reached an all-time high of $363,000, up 23.4% compared to a year ago. After Q2’s growth, signs of cooling emerged as the IHS Markit Composite PMI slid to 59.7 in July from 63.7. Finally, shares of many U.S.-listed Chinese companies fell sharply on Friday. This was a result of authorities stepping up restrictions on the private education industry and increased scrutiny on overseas listings.

U.S. economic data was mixed, headlined by a surprise jump in unemployment claims, which totaled 419,000 versus estimates of 350,000. The decline in Treasury yields last week shows investors believe inflation is not the biggest problem facing the U.S. economy. Instead, investors worry about slowing growth. Even though Federal Reserve officials have signaled that they will hold off raising interest rates until after inflation climbed above their 2% target rate, eroding job growth has shown investors that the economy may not run as fast as anticipated.

Week Ahead

Expect discussions to accelerate amongst Fed officials as to when to start reducing asset purchases and how quickly to taper them, although a final decision is not expected until later in the summer. Their remarks will come ahead of the first look at Q2 GDP on Thursday where 8.5% growth is anticipated, the second-fastest pace since 1983 and exceeded only by last summer’s strong rebound. U.S. consumer confidence and durable goods reports will drop on Tuesday. Tesla, Apple, Microsoft, Google, Facebook, PayPal, and Amazon all report earnings this week. The week and the month close on Friday.

Year-to-date index performance; Dow down 14.56%, S&P down 17.46%, and Nasdaq up 15.12% through the close on Friday.

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Delta Variant Ignites Volatility

jim Financial advisor, Investing, Market Brief, Market Commentary, Market Outlook, Market Review, Retirement Planning, Stock Market, wealth management July 19, 2021July 19, 2021financial advisor, investment planning, market brief, Market Commentary, Market Outlook, Market Review, retirement planning, Stock Market, wealth management

Fears of the spreading delta variant ignited a selloff today. Last week’s weakening under the hood as some areas experience significant drawdowns relative to the broad indexes. Concerns about deteriorating market breadth pushed equity indexes lower. With a light calendar of economic news to start the week, the focus will shift to Q2 earnings announcements.

Last Week

Concerns about deteriorating market breadth pushed equity indexes lower. The S&P 500 and Dow Jones Industrial Average fell 0.5-1.0%, while the Nasdaq slipped 2%. Energy stocks plunged 8%, with the materials, industrials and discretionary sectors also suffering losses. Consumer prices jumped 5.4% from a year ago. The largest increase since August 2008, and rose 0.9% on a monthly basis. Producer prices increased 1% from May and jumped 7.3% Year-over-Year. Most of the increases continued to come from sectors influenced by the shutdown, which Fed Chair Powell reiterated in his Congressional testimony. Powell also noted that the Fed’s benchmarks for tightening monetary policy remain “a ways off”. Crude oil fell 4.5% after Saudi Arabia and the UAE reached a compromise on increasing output, offsetting declining U.S. stockpiles.

Jobless claims reached a new pandemic-era low of 360,000, with continuing claims falling sharply to 3.24 million. U.S. manufacturing reports came in mixed, the New York region rose to a record 43 reading for July. While the Philly Fed said progress was slowing with a decline from 30.7 to 21.9. U.S. industrial production missed estimates in June, posted a 0.4% increase as supply shortages still plagued output. Prospects for Q2 U.S. economic growth were bolstered by a surprising jump in retail sales. Transactions climbed 0.6% Month-over-Month and 18% Year-over-Year, well above pre-pandemic levels. China, the world’s second largest economy expanded 7.9% in the first three months of the year, still strong but down from 18.3% the previous quarter. In Europe Germany’s CPI was in-line at 2.3% Year-over-Year while the UK’s 2.5% outpaced estimates.

Delta Variant and the Week Ahead

With a light calendar of economic news to start the week, the focus will shift to Q2 earnings announcements. Large cap mainstays IBM, Travelers, Netflix, Johnson & Johnson, Verizon, AT&T, Intel and American Express will all provide updates. On Wednesday, the ECB will deliver its monetary policy statement with an eye towards recent inflation dynamics and the difficult-to-assess risk of the coronavirus delta variant. U.S. unemployment claims are expected to fall to another pandemic-era low. Housing starts will highlight the state of the complicated homebuilder market.

Year-to-date index performance; Dow up 13.3%, S&P up 15.2%, and Nasdaq up 11.9% through the close on Friday.

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Summer is here – will stocks melt up or cool off?

jim Financial advisor, Market Brief, Market Commentary, Market Outlook, Market Review, Stock Market June 8, 2021June 8, 2021financial advisor, market brief, Market Commentary, Market Outlook, Market Review, Stock Market

Last week, stocks finished higher after mostly solid economic data, including labor numbers that showed steady progress. Since the 10-year Treasury yield rally began in August 2020, there have been two main consolidation periods. What might be the next catalyst for a move in interest rates? The S&P 500 Index closed within 3 points of its all-time closing high of 4,232.60. Last week all indexes finished up slightly; Dow up 0.69%, S&P 0.64%, and Nasdaq 0.49%.

Last Week

The S&P 500 Index gained 0.64% last week, closing within 3 points of its all-time closing high of 4,232.60. The index has steadily climbed back after hitting its mid-May lows as inflation fears weighed on the index with consumer discretionary and information technology taking the biggest hits. Investors have continued to digest inflation concerns against their expectations for the equities markets. Stocks levitated higher by less than 1% for the week after mostly solid economic data, including labor numbers that showed steady, if not overwhelming, progress. Treasury yields fell after the May non-farm payrolls report came in at a solid gain of 559,000. This was much higher than the 266K the previous month, but lower than the expected 675K.

This led to Friday’s rally with data conveying an improving employment picture in the U.S. recovery. The recovery may be slower than expected. Leading markets to assume the Federal Reserve will continue in its accommodative monetary policies. Nearly half the states have cut overly generous jobless benefits, the unemployment rate dropped to 5.8% in May versus 6.1% in April, and average hourly earnings are up 2.0% versus a year ago. Initial jobless claims fell for the 5th week in a row to 385,000.

The expectation of a quicker recovery in global demand for crude oil helped it advance 4.98% last week, closing at $69.62 per barrel on Friday. This propelled the energy sector be the top performer of the week. OPEC agreed to continue gradually easing production cuts.

The Week Ahead

Since the 10-year Treasury yield rally began in August 2020, there have been two main consolidation periods. The first came just below 1%, beginning in November 2020 to January 2021. The second began in April 2021 and continues today, with the yield currently near 1.56%. The next catalyst? Last week the Federal Reserve said that it plans to start selling its portfolio of corporate bonds and exchange-traded funds that it bought during the pandemic. This is not expected to influence the market much. Recent economic data has been encouraging. But not so strong that the Fed would consider tapering its bond buying just yet.

The next Fed meeting is scheduled for June 15-16. This week offers an update on U.S. inflation along with 10-year and 30-year bond auctions, all of which could produce interest rate volatility. The U.S. trade balance came out today, and consumer sentiment on Friday. The week closes with day 1 of the G7 meetings in London, where Treasury Secretary Yellen looks for support to rewrite international tax rules. Year-to-date index performance; Dow up 13.56%, S&P up 12.62% 6.8%, and Nasdaq up 7.19% through the close on Friday.

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Summer Road Trips and Stock Market Near Highs

jim Financial advisor, Market Brief, Market Commentary, Market Outlook, Market Review, Stock Market June 2, 2021June 2, 2021financial advisor, market brief, Market Commentary, Market Outlook, Stock Market

Summer is the time to hit the open road and explore this big country. But with long road trips can come high expenses – make sure you don’t let unexpected costs creep in while planning the perfect trip. Managing finances is a lot like taking a road trip: You’re setting your sights on a goal and planning the best route to get there. Keep in mind it’s optimal to get an early start (saving), stay on the right roads (budget), and arrive safely at your destination (retirement).

Last week, stocks posted slight gains of 1-2%+ to close out the month of May. Overall, the rapidly expanding U.S. economy continued to forge ahead, with jobless claims hitting another pandemic-era low of 406,000. Inflation is still running hot. Oil prices jumped 4% after an inventory draw of 1.7 million barrels. Bitcoin finished with a small gain but remained volatile, and several Fed governors commented on the benefits of a digital dollar backed by the central bank.

This short week kicks off with inflation updates from the Europe. Last Friday, President Biden laid out a $6 trillion fiscal 2022 budget proposal. Likely to stir up debates lasting through the summer and possibly longer. The end of the week is busy with labor reports. Might we see jobless claims fall under 400,000 for the first time in 14 months? After last month’s surprise drop in non-farm payrolls, analysts anticipate 670,000 jobs to have been created in May. The U.S. unemployment rate is expected to tick down under 6%, steady progress but still a long way away from where the Fed would consider any major monetary policy changes. Year-to-date index performance; Dow up 12.8%, S&P up 11.9%, and Nasdaq up 6.6% through the close on Friday.

If you have any questions on your road trip journey, please reach out – I’m here to help guide you. And don’t forget, I’m happy to assist as your automatic blind spot detection for things you may not see that could put you at risk. Just ask! So rest easy, enjoy the ride, and let’s make this one of the best summers ever. Take care, be safe, and post a picture or two of your road trip.

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Crypto Freefall and Your Portfolio

jim Financial advisor, Market Brief, Market Commentary, Market Outlook, Market Review, Stock Market May 24, 2021May 24, 2021financial advisor, market brief, Market Commentary, Market Outlook, Market Review, Stock Market

Markets ended flat after an up and down week and crypto fell across the board. The growth-oriented Nasdaq outperformed the Dow, S&P 500, and Russell 2000. The economic calendar is light until Thursday, when we get a second look at U.S. Q1 GDP. Monthly durable goods report should offer a glimpse into how supply chains are holding up. The Ethereum Liquid Index (ELX) came crashing back to earth last week. The Dow down 0.43%, S&P 0.39%, and Nasdaq 0.33%.

Last Week

Markets survived another bout of volatility in a roller coaster week. Turbulence in risk assets was partially sparked by a huge selloff in Bitcoin and other crypto currencies. China banned financial institutions from providing services related to the digital transactions. Crypto Bitcoin plunged from $45,000 to near $30,000 before recovering to $36,000.

Treasury yields briefly spiked after the April Fed meeting minutes released. The minutes mentioned that a strong pickup in economic activity would warrant discussions about tightening monetary policy. Chairman Powell reiterated that the recovery remains “uneven and far from complete” and hasn’t shown enough progress for policy change. Housing data cooled a bit. New construction dropped 9.5% in April and existing sales off 2.7%. Builder confidence remains strong due to lack of inventory, low interest rates, and plenty of home buyers. U.S. manufacturing stayed robust even as the Empire State and Philly Fed Manufacturing Indexes came in slightly below expectations.

Week Ahead

The economic calendar is light until Thursday, when we’ll get a second look at U.S. Q1 GDP, no change expected from the +6.4% estimate. The monthly durable goods report should offer a glimpse into how supply chains dealing with material shortages and consumer demand. Housing reports in focus with new home sales and mortgage applications are released. Pending home sales may follow last week’s cooling trend. Unemployment claims expected to fall again. On Friday, the Fed’s preferred measure of inflation, the PCE Price Index, will provide another check on spending behavior. Chicago PMI rounds out the month ahead of Memorial Day weekend.

The Ethereum Liquid Index (ELX), a crypto currency index, came crashing back to earth last week. It had been on a steady climb for the previous 12 months. Posting more than a 2,000% gain at the highs. From those highs, it took 6 days to cut the price in half. A 50% cut isn’t nearly as unusual in crypto as in equity markets, the increased volatility may stick around longer.

Year-to-date index performance; Dow up 11.77%, S&P up 10.65%, and Nasdaq up 4.52% through the close on Friday. Have a fun and safe upcoming holiday weekend!

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