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Weekly Commentary

NDS Weekly Commentary (4.15.19) – Earnings Season Kicks Into Gear

Markets ground higher last week, aided by a Friday rally on the back of bank earnings that boosted investor optimism on the kickoff of earnings season. Before the bell on Friday, JPMorgan Chase reported both Q1 revenues and earnings ahead of expectations. However, profits overall for the S&P500 are expected to decline 4.3% in the 1st quarter from a year ago, according to FactSet. This week will be busy with 55 companies within the S&P500 scheduled to announce earnings.

On the economic front, the International Monetary Fund last week lowered its projections for global growth in 2019 by 0.2% to 3.3%. Slowing growth in China along with the spillover from the trade dispute between US and China are the reasons for the reduction. The Federal Reserve also released minutes from their March meeting, and the uncertainly over their economic outlook would likely leave the federal funds rate unchanged for the remainder of 2019. Also aiding the Fed’s dovish policy, inflation remains somewhat muted with the Consumer Price Index (CPI) increasing 0.4% in March. Over the last 12 months, the CPI increase 1.9% as reported by the U.S. Bureau of Labor Statistics.

For the week, the DJIA declined 0.03% while the S&P 500 gained 0.56%. The Nasdaq increased 0.58%. International markets also gained as the MSCI EAFE index pushed ahead 0.30% and emerging markets equities advanced 0.41%. Small company stocks, represented by the Russell 2000, nudged higher by 0.16%. Fixed income, represented by the Bloomberg/Barclays Aggregate, finished the week lower (-0.12%) as rates increased across all time periods. As a result, the 10 YR US Treasury closed at a yield of 2.56% (up ~6bps from the previous week’s closing yield of 2.5%). Gold prices closed at $1,294/oz and oil prices moved higher to finish at $63.89/barrel amid supply concerns in Libya.

Clients should be on the lookout for quarterly portfolio reports along with our 1st quarter newsletter titled Paradise Regained, a play on John Milton’s follow-on poem and our 4th quarter newsletter title to Paradise Lost.

“In this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin

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