One-two Punch – Monday Morning Market Memo – January 7, 2019

Good morning,

An online dictionary defines a one-two punch as a combination of two blows delivered in rapid succession in boxing, especially a left lead followed by a right cross, and defines it informally as an especially forceful or effective combination or sequence of two things – and this is the kind of one-two punch the market experienced Friday.

The 3 major stock market indices all rose over 3% Friday (with the Dow Jones Industrial Average jumping almost 750 points) after a much stronger-than-expected Jobs Report and accommodative comments by Federal Reserve Chair Jerome Powell lifted market sentiment. First, the U.S. Department of Labor reported the economy added 312,000 jobs in December, well ahead of market expectations for a gain of around 180,000. The second thing propelling the market higher was remarks from the Fed Chair indicating the central bank would be patient in raising rates and that there is “no preset path for policy”. So after the positive one-two punch Friday, the indices all finished in positive territory for the week.

The Dow rose 1.6%, the NASDAQ Composite added 2.3% and the Standard & Poor’s 500 Index climbed 1.9%. Looking to the week ahead, the market will be focused on the relationship between the world’s two biggest economies, as Chinese and U.S. officials are expected to meet for trade negotiations today and tomorrow. Trade tensions have been a major factor behind the recent stock market drop, so this is a really important issue. After that, it’s time to begin looking at the next earnings season. Fourth quarter earnings for 2018 are expected to increase 4.8% according to data from I/B/E/S by Refinitiv.

As always, don’t hesitate to contact us with anything you need.

All the best,
Southport Station Financial Management, LLC