Market Perspective for February 1, 2019

Stocks extended their rally this week, with the S&P 500 Index increasing 1.52 percent. The S&P 500 gained 7.97 percent in January, making it the best January since 1987 and the best single-month performance since March 2016. Energy, communication services, industrials and healthcare sectors issued strong earnings reports.

Apple (AAPL) and Facebook (FB) delivered positive earnings and contributed to the broad market rally, as did energy giants Chevron (CVX) and Exxon Mobil (XOM). Apple, Facebook, Chevron and Exxon gained 5.57, 11.21, 4.55 and 5.83 percent, respectively. Amazon (AMZN) disappointed, losing 2.62 percent on the week after it lowered forward guidance.

The Federal Reserve held rates steady this week, but surprised investors when it backed off its rate hike projections and said it may slow the pace of balance sheet reductions.

Employers added 304,000 new hires in January. Unemployment also ticked up to 4.0 percent, as previously discouraged workers are now seeking employment.

Economic reports delayed by the government shutdown will soon be released. November new home sales exceeded expectations with an annualized sales pace of 657,000, well above the forecast of 563,000. January auto sales also beat expectations with preliminary data showing a 1.3 percent increase over last year. The University of Michigan consumer sentiment index finished up from its advance reading in early January.

Manufacturing PMIs show the U.S. manufacturing sector improving in January. The ISM reading was 56.6 percent. In contrast, China’s PMI fell to 48.3, indicating a retraction.

Crude oil finished the week at $55.26 per barrel, its highest price since mid-November. Natural gas fell to $2.73 per mmBTU this week, its lowest level since September. SPDR Energy (XLE) rose 3.10 percent on the week.


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