Market Perspective for January 19, 2019

Large banks delivered a mix of earnings reports this week. Goldman Sachs (GS) and Citigroup (C) saw their shares rise 14.47 and 11.34 percent. J.P. Morgan (JPM) gained 4.68 percent.  SPDR Financials (XLF) increased 6.12 percent and was the best performing sector this week.

Homebuilder confidence increased in January, as falling interest rates helped improve housing affordability. Employment stayed strong with only 213,000 initial unemployment claims this week, lower than the 220,000 forecast.

Industrial production increased 0.3 percent in December and capacity utilization hit 78.7 percent. Manufacturing output climbed 1.1 percent. The industrial production figure was the best since March of 2018 and the capacity utilization figure is the best since 2015.

The University of Michigan consumer sentiment survey slid to 90.70. They cited short-term issues such as financial market volatility and the government shutdown for the dip in sentiment.

Crude oil rose 4.75 percent this week. Natural gas popped 12.36 percent as a cold snap hit the Midwest and Northeast. SPDR Energy (XLE) climbed 2.95 percent for the week.

The U.S. Dollar Index rallied 0.9 percent versus the widely tracked currency basket. The strong dollar helped domestic shares outperform this week. The Dow Jones Industrial Average led the broad indexes with a gain of 2.96 percent. SPDR S&P 500 (SPY) climbed 2.86 percent, iShares MSCI Emerging Markets (EEM) 2.10 percent and iShares MSCI EAFE (EFA) 1.77 percent.

Aside from the major banks, there were earnings reports from heavyweights in the energy, transportation and communication services sectors. Schlumberger (SLB) climbed 8.12 percent on Friday after it met analyst expectations. Shares of JB Hunt (JBHT) gained 6.19 percent. Kansas City Southern (KSU) rallied 6.13 percent.

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