Market Perspective for February 8, 2019

The Nasdaq led the market higher with a gain of 0.42 percent for the week. The Dow Jones Industrial Average returned 0.17 percent. Technology and industrials powered the gains. SPDR Technology (XLK) rose 1.95 percent, while SPDR Industrial (XLI) advanced 1.64 percent. Falling interest rates boosted SPDR Utilities (XLU), SPDR Real Estate (XLRE) and SPDR Consumer Staples (XLP) by 2.09, 1.35 and 1.05 percent, respectively.

Earnings season was solid this week, despite mixed investor reaction. Alphabet (GOOGL) boosted the Internet sector early in the week and Snap (SNAP), creator of SnapChat rallied midweek. However, Twitter (TWTR) pulled the subsector lower after it reported on Thursday.

Disney (DIS) beat earnings and revenue estimates and indicated its streaming subscription service is off to a strong start. Its shares ended the week with a small gain of 0.19 percent. The direct-to-consumer streaming division experienced $136 million in losses as the firm remains committed to its streaming service. It will also lose $150 million in sales as it cuts its licensing agreement with Netflix (NFLX).

The U.S. Dollar Index rose throughout the week. The U.S. Dollar Index gained 1.3 percent, while the euro fell 1.21 percent. The rising dollar helped SPDR S&P 500 (SPY) outperform its international competition. It returned 0.16 percent while iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM) fell 1.02 and 1.43 percent, respectively.

Crude oil fell 4.6 percent this week and natural gas 5.5 percent as the strong dollar weighed on prices. SPDR Energy (XLE) slid 3.01 percent.

The 10-year Treasury yield fell to 2.63 percent this week. iShares iBoxx High Yield Corporate Bond (HYG) advanced 0.13 percent, Fidelity Corporate Bond (FCOR) 0.17 percent, PowerShares Senior Loan (BKLN) 0.53 percent and iShares 20+ Year Treasury (TLT) 1.15 percent.

 

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