Foundations

Foundations

Weekly Market Commentary

Major market indicies rally

 

Market Recap week ending 10/25/2019

Major US market indices rallied again last week as earnings continued to come in with a positive bias. The S&P fell just short of closing at all-time highs by increasing 1.2% for the week. The Dow gained 0.7%, the NASDAQ led the other indices with an increase of 1.9%, and the Russell 2000 added 1.5%. US Treasuries were once again relatively quiet. The 2-year note yield and 10-year bond yield both increased by five basis points to end the week with yields of 1.63% and 1.80%, respectively. Oil had a solid week with WTI trading higher by almost 5% or $2.68 to close at $56.44 a barrel.

Strong earnings out of blue chips such as Intel, Microsoft, Proctor and Gamble, Caterpillar, and United Technologies overshadowed disappointing results from Amazon, Texas Instruments, McDonalds, Verizon, and Travelers.  Apple inked all-time highs last week, increasing 4.3%. The stock gained on several rating upgrades and raised price targets.

The ECB also met last week. The central bank announced that there would be no change in the EU’s policy rate, but it did reiterate that it would begin its QE program starting in November. The UK and EU also continued to negotiate on Brexit. It appears that the EU will provide another extension to the UK to avoid a hard exit.

The final reading on the University of Michigan’s Consumer Sentiment came in at 95.5 versus expectations of 95.8. The final reading was better than the September figure of 93.2. The results show that the consumer is still in a good place and helped to push the market higher on Friday.

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Darren Leavitt, CFA Portfolio Manager & Sr. Market Analyst

Dan Biagini