In this week’s recap: U.S. benchmarks decline as trade issues remain front and center in the Wall Street conversation; major consumer confidence indices are notably high.
Weekly Economic Update
Presented by Glenn Williams, CFP®, June 3, 2019
THE WEEK ON WALL STREET
Stocks struggled during a 4-day market week as the U.S.-China trade standoff continued to weigh on the minds of market participants. From the Friday, May 24 close to the Friday, May 31 close, the S&P 500 retreated 2.62%; the Nasdaq Composite, 2.41%; the Dow Jones Industrial Average, 3.01%. The MSCI EAFE index of overseas stocks dipped just 1.47% in a week.1,2
Trade is dominating the conversation in the financial markets, with developments steadily unfolding. Wednesday, China’s state media suggested that the country could soon cut off exports of rare earths to the U.S. Late Thursday, the Trump administration announced 5% tariffs on all imports from Mexico, effective June 10; these taxes could rise in the coming months.3,4
MEANWHILE, ON MAIN STREET…
The Conference Board’s consumer confidence index soared to 134.1 in May, its highest reading since November; the consumer view of present economic conditions was the best since the end of 2000. Additionally, the University of Michigan’s consumer sentiment index ended May at 100.00, near the 15-year peak of 102.4 seen earlier in the month.5,6
Spring also brought a solid advance in consumer spending. April’s gain was 0.3%, according to the Bureau of Economic Analysis.6
While Wall Street remains cautious and concerned about trade, consumers appear to be upbeat, sensing widespread economic prosperity. This underscores the fact that the state of the economy does not necessarily correspond to the state of the stock market (and vice versa).
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THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: The Institute for Supply Management releases its latest factory purchasing manager index, which takes the pulse of the U.S. manufacturing sector.
Tuesday: Federal Reserve Chairman Jerome Powell speaks on monetary policy at the Federal Reserve Bank of Chicago.
Wednesday: Payroll giant ADP releases its May private-sector employment snapshot.
Friday: The Department of Labor presents its May employment report.
Source: Econoday / MarketWatch Calendar, May 31, 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: Cracker Barrel Old Country Store (CBRL), Salesforce (CRM)
Thursday: Beyond Meat (BYND), J.M. Smucker (SJM)
Source: Morningstar.com, May 31, 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.
Q U O T E O F T H E W E E K
“The past is but the beginning of a beginning, and all that is or has been is but the twilight of the dawn.”
T H E W E E K L Y R I D D L E
How many bricks does it take to complete a building made of brick?
LAST WEEK’S RIDDLE: If I say, “everything I tell you is a lie,” am I telling you the truth or a lie?
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1 – wsj.com/market-data [5/31/19]
2 – quotes.wsj.com/index/XX/990300/historical-prices [5/31/19]
3 – tinyurl.com/y3qycvq6 [5/30/19]
4 – foxbusiness.com/markets/us-stocks-wall-street-may-31-2019 [5/31/19]
5 – bloomberg.com/news/articles/2019-05-28/u-s-consumer-confidence-tops-forecasts-rises-to-six-month-high [5/28/19]
6 – investing.com/economic-calendar/ [5/31/19]