Market Perspective for March 15, 2019

The S&P 500 Index and Nasdaq made new 2019 highs this week. The Nasdaq advanced 3.77 percent, followed by a 2.89-percent rally in the S&P 500 Index. The Dow Jones Industrial Average climbed 1.57 percent despite Boeing (BA) weighing on the index. SPDR Technology (XLK) jumped 4.89 percent, while SPDR Energy (XLE) and SPDR Healthcare (XLV) rallied 3.31 and 3.28 percent, respectively.

Boeing (BA) shares fell 10.33 percent on the week as governments grounded 737 Max 8 planes. Losses were trimmed on Friday after the company said a software patch would be ready sooner than expected. Funds with significant exposure to Boeing underperformed this week. Along with the Dow Industrials, iShares US Aerospace & Defense (ITA) slid 1.59 percent and SPDR Industrial (XLI) gained only 0.28 percent.

Retail sales data out on Monday showed sales grew 0.2 percent in January and 0.9 percent ex-autos. The National Federation of Independent Business said small business confidence rose in February. Consumer prices increased 0.2 percent in February, in line with expectations.

Construction spending increasing 1.3 percent in January, more than double economist estimates. New home sales eased to 607,000.  Weekly jobless claims held steady at only 229,000. The University of Michigan’s advance consumer sentiment for March hit 97.8, up from 93.8 last month and beating forecasts of 95.0.

The U.S. Dollar Index declined 0.8 percent after the British pound and euro rallied on Brexit news. The UK parliament voted to stay in the European Union if there’s no exit deal, though the EU must agree. A March 29 “no deal” exit remains possible. iShares MSCI United Kingdom (EWU) increased 3.47 percent and iShares MSCI Eurozone (EZU) climbed 3.44 percent.

A surprise draw in crude oil inventory lifted West Texas Intermediate crude by 4 percent this week. Natural gas fell more than 2 percent.

Broadcom (AVGO), Oracle (ORCL) and Adobe Systems (ADBE) announced earnings reports this week. Broadcom beat earnings expectations, though revenues were lower than expected. Shares gained 9.86 percent for the week. Oracle (ORCL) beat earnings forecasts but shares finished with only a gain of 0.32 percent on the week. Adobe (ADBE) disappointed investors as forward-looking guidance was unimpressive. Still, it managed a return of 1.18 percent.

 

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