If one just looked at the returns for the stock market last week – with the Dow Jones Industrial Average down .04%, the NASDAQ Composite up .16%, and the Standard & Poor’s 500 Index down .16% – the likely conclusion would be that it was a boring, quiet, holiday-shortened week. On the contrary, things were quite eventful.
The market was keeping its winning ways going New Year’s week as Chinese stimulus and more confirmation around the phase-one trade deal sent the stock market to all-time high on Thursday. Things quickly reversed course on Friday however, after weaker-than-expected U.S. manufacturing data and conflict in the Middle East rattled investors – sending stocks lower. The Dow lost over 230 points (finishing off its lows, but still its worst day in over 4-weeks) after the U.S. confirmed it killed Iran’s top military commander in an airstrike. While the geopolitical risk pushed equity prices lower, “safe-haven” plays such as Treasury bonds and gold (+1.6%) moved higher.
The market will be keeping a close eye on further developments in the Middle East going forward, and the angst is a headwind for stocks. Away from the geopolitical, we’ll get a look at some domestic economic data in the week ahead. Durable orders and Factory orders are scheduled to be released this week, but the big number is the December Jobs Report due out on Friday. Market expectations are for the economy to add about 160,000 jobs and for the unemployment rate to hold steady at 3.5%. Let us know any questions you may have, or if you would to set up a meeting.
All the best – Southport Station Financial Management, LLC