The stock market fell last Friday, snapping a 4-day win streak, with the Dow Jones Industrial Average dropping over 270 points on worries over the coronavirus and its impact on the Chinese and global economy. On Friday China confirmed over 31,000 cases and over 630 deaths – which is impacting travel, shopping, and consumption. Still, the major stock market averages posted strong gains for the week. The Dow moved 3% higher, the NASDAQ Composite jumped 4% and the Standard & Poor’s 500 Index gained 3.2%.
Positive factors behind the weekly gains included an announcement by China to cut tariffs on $75 billion worth of U.S. goods, better-than-expected U.S. manufacturing data, and a Jobs Report that came in well ahead of consensus estimates. The U.S. Department of Labor reported the economy added 225,000 jobs in January, versus expectations for a gain of around 157,000. Wage growth also topped expectations, coming in at 3.1%.
Markets are being pushed and pulled, by the impact of the coronavirus on one hand, and economic data which seem to be supporting the case for a pickup in economic growth on the other hand. So far at least, the Bull (market) seems to be immune from the coronavirus, with the stock market hovering around its all-time high. Looking to the week ahead we’ll get a fresh batch of earnings reports and some more economic data to digest. Companies scheduled to report earnings include Lowe’s, Under Armour, Cisco Systems, CVS Health, Expedia, and PepsiCo. The week wraps up on Friday with economic reports on capacity utilization, industrial production, and consumer sentiment. As always, don’t hesitate to call with any questions or if you would like to set up a meeting
All the best – Southport Station Financial Management, LLC