Telemus Weekly Market Review

February 19 – February 23 Week in Review

Stocks advanced once again last week thanks to a last-minute rally on Friday that reclaimed losses registered on Tuesday and Wednesday. The markets were closed on Monday in celebration of Presidents’ Day. For the week the S&P 500 gained 0.55%, the Dow Jones Industrial Average added 0.36%, and the tech-heavy Nasdaq Composite outperformed, jumping 1.35%.

The Wednesday release of the minutes from the January FOMC meeting was perhaps the most notable event of an otherwise relatively quiet week. The minutes were somewhat outdated considering the last FOMC meeting took place before a host of events that may have altered the Fed’s perspective a bit, including the release of the CPI and PPI reports for January, the passing of a two-year budget deal in Congress that will increase spending by approximately $420 billion, and a sharp sell off on Wall Street.

Nonetheless, the minutes did reveal that almost all FOMC members expect inflation to increase in 2018 and that a majority of members believe a stronger outlook for economic growth raises the “likelihood that further gradual policy firming would be appropriate.”

The yield on the benchmark 10-yr U.S. Treasury note ticked up to a four-year high on Wednesday following the minutes, closing at 2.94%, but slipped back to 2.87% by Friday’s close finishing flat for the week. Meanwhile, the 2-yr U.S. Treasury yield jumped to 2.26% following the minutes, its highest level since September 2008, but finished Friday at 2.24% locking in a weekly gain of five basis points. In addition to the minutes, the 2-yr yield was also bolstered by a relatively weak 2-yr note auction on Tuesday.

In corporate news, shares of Wal-Mart tumbled 10.2% on Tuesday after the world’s largest retailer reported lower-than-expected earnings for the fourth quarter and issued disappointing profit guidance for fiscal year 2019. Conversely, Hewlett Packard Enterprise rallied 10.5% to a new all-time high on Friday after reporting better-than-expected earnings and revenues and issuing upbeat profit guidance. They also announced a plan to return $7 billion to shareholders via share repurchases and a dividend increase.

As for the sector standings, seven of eleven S&P 500 groups finished last week in positive territory. The technology, materials, and energy groups finished at the top of the leaderboard, while the consumer staples and utilities sectors finished at the bottom.

The S&P 500’s 50-day simple moving average proved to be an area of resistance for the benchmark index on several occasions last week, the most notable of which was on Thursday when the S&P 500 retraced the entirety of a 1.2% intraday gain after hitting the key technical level. However, the S&P 500 finally managed to climb above its 50-day simple moving average on Friday, which helped fuel further buying to bring the index into positive territory for the week. Following last week’s trading, the S&P 500 is still down 4.4% from the record high it hit on January 26.

Crude oil ended Friday at $63.57 a gain of over 3% from last week’s close.

February 26 – March 2 Economic Calendar

  • Monday
  • James Bullard Speaks
    8:00 AM ET
  • Chicago Fed National Activity Index
    8:30 AM ET
  • New Home Sales
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Jerome Powell Speaks
    10:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • Durable Goods Orders
    8:30 AM ET

  • International Trade in Goods
    8:30 AM ET
  • Retail Inventories [Advance]
    8:30 AM ET
  • Wholesale Inventories [Advance]
    8:30 AM ET

  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Jerome Powell Speaks
    10:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • GDP
    8:30 AM ET
  • Chicago PMI
    9:45 AM ET
  • Pending Home Sales Index
    10:00 AM ET

  • EIA Petroleum Status Report
    10:30 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Jerome Powell Speaks
    10:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET

  • Personal Income and Outlays
    8:30 AM ET
  • PMI Manufacturing Index
    9:45 AM ET

  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • ISM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • Jerome Powell Speaks
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • William Dudley Speaks
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Consumer Sentiment
    10:00 AM ET

  • Baker-Hughes Rig Count
    1:00 PM ET
  • New Home Sales
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET

  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Jerome Powell Speaks
    10:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This market commentary is a matter of opinion and is for informational purposes only.  It is not intended as investment advice and does not address or account for individual investor circumstances.  Investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance.  The statements contained herein are based solely upon the opinions of Telemus Capital, LLC.  All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.