Market Update – Monday (Tuesday) Morning (Afternoon) Market Memo – January 21, 2019

Good morning,

The U.S. stock and bond markets are closed today in observance of Martin Luther King, Jr. Day. The stock market is getting a well-deserved day off to rest after a strong start to the year. The Dow Jones Industrial Average and the Standard & Poor’s 500 Index are both up about 6% so far this year, rebounding somewhat from a volatile and painful end to 2018.

Equities are shrugging off the government shutdown and some high profile earnings misses, focusing instead on “bargain hunting” and rallying on reports of progress in the trade negotiations between the U.S. and China. The Dow jumped over 300 points last Friday after reports circulated that China offered a 6 year plan to increase imports from the U.S., in an effort to eliminate the annual U.S. trade deficit by 2024. The market remains very focused on trade between the world’s two biggest economies and reports of progress was music to its ears. For the week, the three major averages all posted solid gains of around 3%.

Looking to the week ahead, along with US-China trade developments, the market will have an increased number or earnings reports to digest. Big names reporting in the week ahead include IBM, Johnson & Johnson, Ford Motor Company, Procter & Gamble, Starbucks, Intel, and Colgate-Palmolive. In total, for the fourth-quarter of 2018 the earnings growth rate estimate for the Standard & Poor’s 500 Index is 10.6%, which would mark the fifth straight quarter of double-digit earnings growth, according to data from FactSet . As always, don’t hesitate to call us with any questions or if you would like to schedule a meeting.

All the best,
Southport Station Financial Management, LLC