Market Perspective for April 1, 2019

Equities closed higher on Monday after solid economic data in China and the United States. The S&P 500 Index advanced 1.16 percent. The Dow Jones Industrial Average and NASDAQ advanced 1.27 and 1.29 percent, respectively.  The Russell 2000 gained 1.06 percent.

Market performance was boosted after China announced trade concessions. It will extend the suspension of auto tariffs that were in response to U.S. tariffs. It also will list fentanyl as a controlled substance, potentially curtailing the massive inflow of opioids into the United States.

Caterpillar (CAT) and Boeing (BA) reacted favorably to trade news and helped the industrial  outperform. SPDR Industrial (XLI) gained 2.07 percent. iShares US Aerospace & Defense (ITA) climbed 2.25 percent as did iShares US Transports (IYT). Crude oil also bounced on trade and economic data news. It exceeded the $60 level for the first time since mid-November, finishing the day above $61.71. SPDR Energy (XLE) rose 1.35 percent.

iShares Edge MSCI Min Vol USA (USMV) hit a new all-time high on Monday, while Vanguard Dividend Appreciation (VIG) has moved to within 0.25 percent of its all-time high.

The manufacturing purchasing managers’ index (PMI) for the U.S. rose from 54.2 to 55.3 in March. China’s swung from contraction to expansion in March. The Eurozone’s PMI fell further below 50, indicating an accelerating contraction and lowest since April 2013. Britain’s jumped to 55.1, the best reading in more than a year.

Construction spending rose 1.0 percent in February, beating forecasts of a 0.1 percent decline. Retail sales fell 0.2 percent, missing the 0.3 percent growth estimate. Sales missed in part because January sales growth was revised higher from 0.2 percent to 0.7 percent. The split between physical and online sales continued. Grocery stores, building materials and general merchandise stores all saw sales decline in February, but online sales increased 0.9 percent.

Durable goods orders for February, motor vehicle sales for March and the ISM services PMIs are out later this week. On Friday, the March employment report will be released. Economists predict 177,000 new jobs, 3.8 percent unemployment and 0.3 percent wage growth.

Walgreen’s Boots Alliance (WBA) highlights a light week in earnings reports. Analysts are looking for $1.74 per share in earnings, up a penny from the year-ago quarter. They see revenue hitting $34.62 billion, up from $33.02 billion last year.

Signet Jewelers (SIG), Acuity Brands (AYI), Constellation Brands (STZ), RPM International (RPM) and Duluth Holdings (DLTH) also report.


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