NDS Weekly Commentary 1.6.20 – Volatility Ahead

January 6, 2020

Following 2019’s strong gains and momentum, stocks began 2020 and last week with a sense of optimism. However, by the end of the week, markets were rattled by increased tension in the Middle East resulting from the death of Iranian General Soleimani from a U.S. drone strike. Stocks finished down on Friday erasing gains from earlier in the week. For the week, the S&P 500 was off -0.1%, the DJIA and MSCI EAFE were flat with emerging equities up 0.48%. As a result of the increased volatility, investors sought safety in government bonds and gold. The rate on the 10 year U.S. treasury fell from 1.88% to 1.79% and gold rose 2.15% for the week. The best performing equity sectors last week were industrials, energy and technology.

Economic reports scheduled to be released this week include both the ISM and Markit non-mfg. Purchasing Manager’s Indexes (PMI), international trade, and the monthly jobs report. Geopolitics will likely grab headline news especially relations regarding Iraq and Iran. For 2020, most economic projections look for the year to have modest GDP growth of around 2% with no recession. A well-diversified portfolio should help you weather a volatile period in the markets.

Let’s make it a good year!

“We must stop politics at the water’s edge.” – Arthur Vandenberg