Weekly Market Commentary

Market Recap for the week ending 1/18/19

-Darren Leavitt, CFA

Despite somewhat disappointing corporate earnings results and a failed Brexit vote, markets continued to rally last week.  The S&P 500 gained 2.9% for the week while the Dow, NASDAQ, and Russell 2000 increased 3%, 2.7%, and 2.4%, respectively.  The markets were able to shrug off some disappointing news and instead focused on reports that the Trump administration’s trade negotiations had yielded some positive results.  Specifically, reports indicated that the administration would drop current tariffs on Chinese goods in return for China to effectively import enough goods over the next few years to eliminate the US/China trade deficit.

The week also produced some decent economic data which seemed to relieve some economic growth fears that had weighed on investors sentiment in the last part of 18.  Technically the market was also able to go through and hold its 50-day moving average and in turn induced some short covering which helped to propel the market even higher.  The positive tenor was most evident in the more cyclical sectors, with the materials, industrials, tech, and financials all having a strong showing last week.  Notably, the financials, despite a mixed bag in earnings results, were able to continue their rally and have now gained nearly 9% in the month of January.  On the other hand, Treasuries continued to struggle.  The 2-year note yield increased 6 basis points to close at 2.61%, while the 10-year bond yield tacked on 8 basis points to close at 2.78%.  Oil continued to be bid with WTI closing just shy of $54 a barrel.  API figures showed a decent draw in oil inventories and the Baker Hughes Rig count figure was also off significantly, which seemed to temper supply concerns.  There were no changes to our models last week.  Please let us know if you have any questions.

The information in this Market Commentary is for general informational and educational purposes only. Unless otherwise stated, all information and opinion contained in these materials were produced by Foundations Investment Advisers, LLC (“FIA”) and other publicly available sources believed to be accurate and reliable.  No representations are made by FIA or its affiliates as to the informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. No party, including but not limited to, FIA and its affiliates, assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

The views and opinions expressed are those of the authors do not necessarily reflect the official policy or position of FIA or its affiliates.  Information presented is believed to be current, but may change at any time and without notice.  It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Investment advisory services are offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

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