Market Perspective for April 8, 2019

Results for the broad indexes were mixed today. The S&P 500 finished with a gain of 0.10 percent, while the NASDAQ increased 0.19 percent.  The Dow Jones Industrial Average and Russell 2000 lost 0.32 and 0.22 percent, respectively. SPDR Energy (XLE) gained 0.44 percent, SPDR Consumer Staples (XLP) 0.41 percent and SPDR Technology (XLK) 0.38 percent. However, analysts downgraded General Electric (GE) and Boeing (BA) cut production of its 737 MAX jet.

Earnings season kicks off with Delta Air Lines (DAL), Bed, Bath & Beyond (BBBY) and Fastenal (FAST) will report over the coming days. On Friday, Wells Fargo (WFC), JPMorgan (JPM) and PNC Financial (PNC) will deliver results. Analysts are optimistic about JPM earnings, forecasting $2.35 per share. Wells Fargo is still dealing with fallout from its accounting scandal.

Analysts have set the market to exceed expectations as the consensus S&P 500 earnings growth forecast is currently at negative 4.2 percent. Major components have driven the move, such as the consensus Apple (AAPL) forecast falling from $2.96 per share at the end of 2018 to $2.36. Exxon Mobil (XOM) forecasts have fallen from $1.22 to $0.86 per share.

The minutes of the March Federal Reserve meeting will be released this week. Along with a pause in the rate hike cycle at the prior meeting, Fed officials also announced an end to balance sheet reduction.

Consumer and producer price inflation for March will also be released. Economists predict consumer prices to have risen 0.4 percent and producer prices 0.3 percent. Rising oil prices are a major factor in those higher forecasts. The University of Michigan will publish the advance reading for its April consumer sentiment survey. The Job Openings and Labor Turnover Survey (JOLTS) should show more job openings than unemployed Americans, once again.

Britain will likely get a Brexit extension when it meets with the European Union this week. The latest reports indicate Prime Minister Theresa May is considering a second referendum. There’s also some fear that another delay could greatly benefit populists across Europe in the upcoming European Parliamentary elections. All 27 member states must approve an extension or Britain leaves on April 12 under current law.

Crude oil extended its winning streak on Monday, trading above $64 per barrel.

The U.S. Dollar Index held at 97 this week, near its 52-week high.

 

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