The major stock market averages moved sharply lower last Friday, with the Dow Jones Industrial Average falling over 600 points as worries grew over the health and economic impact of the coronavirus. Several cases of the virus have been confirmed here in the US and reports indicate over 17,000 cases worldwide. The spread of the virus (mostly China centered) has reduced economic activity and the extent of the future severity remains unknown. The uncertainty weighed on the equity market, and for the week the Dow dropped 2.5%, the NASDAQ Composite lost 1.8%, and the Standard & Poor’s 500 Index gave back 2.1%.
On the bright side from last week, several blue chip companies, including Apple, Coca-Cola, Amazon.com, and Microsoft reported better-than-expected earnings and/or revenues. Further, the stock market is off to a strong start this morning with the Dow recouping about 1/3rd of its Friday losses after the Institute for Supply Management reported its manufacturing index expanded in January (market expectations were for a contraction).
Looking to the week ahead the situation with the coronavirus and earnings will be focal points for the market. Companies scheduled to report this week include Alphabet, Chipotle Mexican Grill, Ford Motor, Clorox, Walt Disney, General Motors, Merck, Qualcomm, Kellogg, Dunkin Brands, Twitter, and Abbvie. Additional economic data due out this week includes Factory Orders, the ISM Non-Manufacturing Index, and the January Jobs Report – where expectations are for a gain of approximately 157,000 jobs and for the unemployment to remain steady at 3.5%.
As always, feel free to call us with any questions or if you would like to set up a meeting.
All the best – Southport Station Financial Management, LLC