The Week on Wall Street
Stocks fell sharply at the start of last week over trade tensions, then recovered with help from strong earnings and indications that U.S.-China trade talks would continue. Even so, the major indices had a down week. The S&P 500 lost 0.76%, while the Nasdaq Composite fell 1.27%, and the Dow Jones Industrial Average declined 0.69%.
In contrast, the MSCI EAFE benchmark for international stocks rose 0.19%.[1]^,[2]
The Latest Trade Developments
A broad selloff occurred Monday after China announced it would respond to increased U.S. tariffs by boosting its own import taxes on $60 billion of U.S. products. Friday morning, the Street breathed a sigh of relief as the Trump administration decided to delay 25% tariffs planned for imported cars and car parts; they had been slated to take effect on May 18. Just hours later, President Trump announced an end to U.S. tariffs on metals coming from Canada and Mexico.
At midweek, Secretary of the Treasury Steven Mnuchin told reporters that he expected the U.S. to resume trade negotiations with China in “the near future.”[3]^,[4],[5]
Earnings Season Winds Down
The first-quarter earnings scorecard is nearly complete, as more than 90% of S&P 500 companies have reported actual Q1 results.
Stock market analytics firm FactSet notes that 76% of these firms have beaten consensus earnings-per-share estimates. Overall earnings for S&P 500 components have surpassed expectations by 5.4%. Both these percentages are above 5-year averages.[6]
Final Thought
The market is quite sensitive to trade developments at the moment, and it is unclear whether this will be a short-term trend or a long-term influence on prices. While the U.S. prepares its next moves, China also is preparing its response to any new U.S. tariffs, which could include manipulating its currency.
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The Week on Wall Street
As we noted recently, Wall Street has a wandering eye. Last week, it focused on the new tariff threats in the ongoing U.S.-China trade dispute. Stocks fell across five trading sessions: the Dow Jones Industrial Average lost 2.12%, the S&P 500, 2.18%; the Nasdaq Composite, 3.03%. International stocks also fell: the MSCI EAFE index declined 3.06%.
Earnings and big-name initial public offerings mattered little last week. Traders were more concerned about how consumers and corporations might be affected by higher import taxes in future quarters.[1]^,[2]
Tariffs Increase
At 12:01 a.m. Friday, duties on $200 billion worth of Chinese products coming to the U.S. rose from 10% to 25%. Just days earlier, President Trump had tweeted that the U.S. might also tax another $325 billion of Chinese imports, mainly consumer goods.
While the proposed new taxes might take months to implement, institutional investors reacted negatively to this information, perceiving that trade talks were stalled.[3]^,[4]
Final Thought
A few weeks ago, market watchers noted the huge number of initial public offerings anticipated for 2019. One well-known tech firm completed its IPO on Friday, and the wave of tech IPOs is still building. According to research firm CB Insights, the average stock market valuation of the venture-capital-backed tech companies going public this year is $9.6 billion.[5]  
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The Week on Wall Street
Stocks were up and down last week, and the three major benchmarks ended up little changed after five trading days. The S&P 500 rose 0.20% for the week; the Nasdaq Composite, 0.22%. The Dow Jones Industrial Average declined 0.14%.
The MSCI EAFE index, a benchmark for international stocks, declined 0.21%.[1]^,[2]
The Fed Emphasizes Patience
The Federal Reserve held interest rates steady at its May meeting. Its May 1 policy statement noted “solid” job growth and economic activity, but only tame inflation pressure.
While the Fed was not expected to make a move, some investors wondered if its latest policy statement might hint at the possibility of a rate cut later this year. No such hint appeared. Fed chair Jerome Powell told the media Wednesday that “we don’t see a strong reason for moving in one direction or the other.”[3]
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The Week on Wall Street
Stocks returned to record territory, with both the S&P 500 and the Nasdaq Composite closing at historic highs. The S&P gained 1.20% for the week; the Nasdaq, 1.85%. The Dow Jones Industrial Average lagged, losing 0.06%. The MSCI EAFE index of international stocks lost 0.52%.[1]^,[2]
The S&P took only 17 weeks to fully rebound from its December low.[3]
A Shift in Focus
Last month, Wall Street fixated on trade, reacting to even the slightest hint of progress in U.S.-China negotiations. This month, the trade talks have taken a back seat, and the fixation is on earnings.
Anxieties about a possible earnings recession may be fading. So far, first-quarter results for S&P 500 firms are 5.3% above expectations; that compares to a 5-year average of 4.8%.[4]
At some point, trade talk will come back, or other developments will lead Wall Street to chase other trends. The thing to remember is that Wall Street is fickle: what preoccupies it one week may be shrugged off the next. Short-term trends ultimately amount to background noise during the long-term pursuit of your financial goals.
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The Week on Wall Street
A short and relatively placid trading week wrapped up Thursday, with the major indices turning in mixed performances. The S&P 500 retreated 0.08%, the Nasdaq Composite advanced 0.17%, and the Dow Jones Industrial Average gained 0.56%. The MSCI EAFE index, tracking foreign stocks in developed countries, added 0.65%.[1]^,[2],[3],[4]
Nothing really catalytic emerged to drive the market last week, and volumes were low.
Earnings Season Update
More than 78% of S&P 500 firms reporting so far this earnings season have surpassed analyst expectations, according to FactSet. Since guidance tends to be conservative, there is the possibility that more companies will beat forecasts than expected.[5]
The initial public offering market remained strong. Two high-profile technology companies came public on Thursday and were met with enthusiasm from investors. As mentioned in recent weeks, 2019 could be a banner year for IPOs.
Retail Sales Rebound
March’s 1.6% gain was the biggest monthly advance seen since September 2017. Sales of cars and gasoline rose more than 3%.
If the upcoming March consumer spending report is also impressive, concerns about the current business cycle peaking may recede.[6]
Final Thought
Nearly 800 companies will report earnings this week, including some high-profile names. This kicks off five weeks of active daily earnings reports.
Investors will watch corporate profits, guidance, and fundamental indicators with great interest, to try and glean whether the economy is strengthening or softening. Reports on first-quarter economic growth and existing home sales will command particular attention.
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The Week on Wall Street
The big story last week was the sudden grounding of Boeing 737 Max 8 and 9 passenger jets in dozens of countries. The financial effects of this ban could potentially impact the airline industry and segments of the economy for months.[1]
While the news created a headwind for the Dow Industrials, stocks managed to post solid gains for the week. The Nasdaq Composite rose 3.12%; the S&P 500, 2.46%; the Dow, 2.25%.[2]^,[3],[4]
Bullish sentiment was also evident overseas. Looking at the MSCI EAFE index, international stocks advanced 1.93%.[5]
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The Week on Wall Street
Stocks lost a little ground as February gave way to March. While domestic and overseas political developments made headlines, the market stayed relatively calm: from Monday’s open through Friday’s close, the S&P 500 ceded just 0.17%, finishing the week at 2,803.69.[1]
The Dow declined 0.65% in five trading sessions to 26,026.32, while the Nasdaq finished the week 0.06% higher at 7,595.35. The MSCI EAFE index of international stocks rose 0.24% for the week.[2]^,[3],[4]
Volatility has dropped in the past few weeks. Wall Street has grown less anxious about the possibility of new tariffs and higher interest rates this year.
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The Week on Wall Street
Major U.S. stock benchmarks eked out slight gains last week, with corporate profit reports and news about U.S.-China trade negotiations vying for investor attention over five trading sessions.
The big three ended the week little changed from where they settled the previous Friday. The Dow Jones Industrials rose 0.17% percent, while the S&P 500 Index gained 0.05% percent. The NASDAQ Composite ended the week up 0.47%. Looking at international stocks, the MSCI EAFE index retreated 0.47%.^1,2
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Last week closed out one of stocks’ top January performances in years. In fact, both the S&P 500 and Dow posted their best January results in at least 3 decades.[1] For the week, major domestic indexes were also up. The S&P 500 gained 1.57%, the Dow added 1.32%, and the NASDAQ increased 1.38%.[2] The Dow’s performance marked its 6^th week of gains in a row.[3] Internationally, MSCI EAFE stocks also posted growth, rising 0.91%.[4]
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For the first time in months, U.S. markets experienced little movement last week.[1] The Dow and NASDAQ did have their 5^th week of gains in a row, but their increases were small: 0.12% and 0.11%, respectively. Meanwhile, the S&P 500 broke its 4-week winning streak with a 0.22% loss. [2] Internationally, the MSCI EAFE also posted modest returns, gaining 0.47% for the week. [3]
What topics were on investors’ minds?
Despite the relative lack of market drama last week, investors still had plenty to consider. For example, the following details emerged:

• Conflicting messages came out on trade tension with China.
• The International Monetary Fund (IMF) downgraded its forecast for global growth.
• Corporate earnings season continued.[4]

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