Market Perspective for May 18, 2019

Equities moved lower after trade talks between the United States and China deteriorated this week. The Dow Jones Industrial Average fell 0.69 percent for the week, the S&P 500 Index 0.76 percent, the Nasdaq 1.26 percent and the Russell 2000 Index 2.37 percent.

SPDR Utilities (XLU) and SPDR Consumer Staples (XLP) were the best performing sectors on the week. They gained 1.43 percent and 0.77 percent thanks in part to lower interest rates.

iShares Edge MSCI Minimum Volatility USA (USMV) continued its stretch of outperformance. It rose 0.52 percent for the week.

Small business confidence jumped in April according to the National Federation of Independent Business. Consumer confidence beat expectations; the University of Michigan Index hit 102.4, well ahead of the 97.1 consensus forecast.

Housing starts and building permits increased faster than anticipated in April. Weekly jobless claims held near 40-year lows. The Philly Fed’s measure of regional manufacturing activity nearly doubled from 8.5 in April to 16.6 in May.

Crude oil was steady this week, trading between $60 and $64 per barrel. The 10-year Treasury yield slipped to 2.39 percent. The U.S. Dollar Index rose 0.7 percent as the dollar made new 52-week highs against major currencies including the Chinese yuan, Australian dollar and Korean won.

Earnings data was strong this week. Wal-Mart (WMT) saw a 5.5 percent increase in U.S. operating income and beat earnings estimates. Cisco (CSCO) delivered strong earnings; shares rallied 5.64 percent for the week.

Nvidia (NVDA) beat expectations, but forward-looking guidance concerned investors. Shares slipped 7.23 percent.

Chip supplier Applied Materials (AMAT) also beat estimates, sending shares up 4.68 percent on the week.

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