Turkey / “Turkey” – Monday Morning Market Memo – November 26, 2018

Good morning,

We hope you had a good Thanksgiving! The traditional holiday fare for thanksgiving is of course turkey, but for investors is was a “turkey” of a week as stock indices registered their worst Thanksgiving week since 2011. For the week the Dow Jones Industrial Average and the NASDAQ Composite shed 4.4% and 4.3% respectively, while the Standard & Poor’s 500 Index declined 3.8%.

The market was pressured lower by factors including a bear market in crude oil and the FAANG stocks, ongoing trade tensions between the U.S. and China, uncertainty over Federal Reserve interest rate hikes, and worries over the pace of global economic growth. Two of these items will be even more in focus during the week ahead as we’ll get an appearance by the Fed Chair, and a meeting between President Trump and China’s President Xi.

Federal Reserve Chair Jerome Powell will be speaking at the Economic Club of New York on Wednesday, and investors will be seeking clarity on future interest rate hikes. Currently there is a 72% chance the Fed will raise rates at its December meeting, according to the CME Group’s FedWatch Tool. However, the Fed’s path after that is unclear and has been a source of concern for the market. Onto the US and China……

President Trump and China’s Xi Jinping are scheduled to meet Saturday at the Group of 20 summit in Argentina, and financial markets are hoping for any signs of truce regarding tariffs and trade between the two countries, who by the way are the two largest economies in the world. So we have two major focal points the market will be closely tracking this week, both of which may impact market sentiment and psychology. As always, please call with any questions or if you would like to set up a meeting.

All the best,
Southport Station Financial Management, LLC