July 8, 2019

In this week’s recap: stocks hit record peaks, then descend after the Friday release of the June jobs report; further tariffs are planned for European imports.

THE WEEK ON WALL STREET

U.S. stock benchmarks opened a new quarter positively. The S&P 500 gained 1.65% in the opening week of July; the Dow Jones Industrial Average, 1.21%; the Nasdaq Composite, 1.94%. Overseas, stocks in developed markets, tracked by MSCI’s EAFE index, rose 1.43%.

On July 3, the S&P posted its latest record close: 2,995.82. On July 5, stocks fell, slightly, after the Department of Labor released its June employment report.

JOBS REPORT BEATS EXPECTATIONS 

Analysts polled by Bloomberg thought the economy would add 160,000 net new jobs in June. Instead, the number was 224,000. The headline unemployment rate ticked up 0.1% to 3.7%; the U-6 rate, including the underemployed, also rose 0.1% to 7.2%.

Before the large June gain was announced, traders were confident that the Federal Reserve would adjust interest rates this summer. This latest hiring data called that confidence into question.

MORE TARIFFS SLATED FOR EUROPEAN GOODS

The federal government plans to levy new import taxes on $4 billion of food and beverages coming from the European Union, the Office of the U.S. Trade Representative said last week. This would complement the tariffs on $21 billion worth of E.U. imports announced in April.

The U.S. and E.U. generate more than $1 trillion in commerce through trade relationships. European exports to the U.S., however, far outweigh U.S. exports to the E.U.

 

WHATS AHEAD

Monday, July 15 will mark the start of the next earnings season. Money-center banks report first, followed by companies from a variety of industries.

Tip of the Week

A good, small-business invoice ideally states five things: the timeframe the company gives the client to pay, whether the client is permitted to pay upfront, whether late fees can be charged, the kinds of payments accepted, and if delivery will occur before or after receipt of payment.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Federal Reserve Chairman Jerome Powell delivers opening remarks at a conference of the Federal Reserve Bank of Boston.

Wednesday: Fed Chair Powell testifies on monetary policy in Congress, and the Fed also releases the minutes from its June meeting.

Thursday: The June Consumer Price Index appears, showing monthly and yearly changes in inflation.

Source: Econoday / MarketWatch Calendar, July 5, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: PepsiCo (PEP)

Wednesday: Bed Bath & Beyond (BBBY)

Thursday: Delta Air Lines (DAL), Fastenal (FAST)

Source: Zacks.com, July 5, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Quote of the Week

“All our discontent at what we lack results from lack of gratitude for what we have."

DANIEL DEFOE

Riddle of the Week

Pronounced as one letter, written with three, there are only two letters in me. I’m read from both ends, and the same either way. What word am I?

LAST WEEK’S RIDDLE: what is the difference between a schoolboy studying and a farmer watching his cattle?

ANSWER: One is stocking his mind, while the other is minding his stock. 

Valley Oak Wealth Management can be reached at 415.898.4439 info@valleyoakwm.com or ValleyOakWM.com

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Tim Russel is a Wealth Advisor with, and securities offered through, LPL Financial member FINRA/SIPC
This material does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
CITATIONS:
1 – quotes.wsj.com/index/SPX/historical-prices [7/5/19]
2 – quotes.wsj.com/index/DJIA/historical-prices [7/5/19]
3 – quotes.wsj.com/index/COMP/historical-prices [7/5/19]
4 – quotes.wsj.com/index/XX/990300/historical-prices [7/5/19]
5 – marketwatch.com/story/sp-500-heads-for-3rd-straight-record-ahead-of-private-sector-jobs-report-2019-07-03 [7/3/19]
6 – fortune.com/2019/07/05/us-hiring-jobs-data-rebounds/ [7/5/19]\
7 – cnn.com/2019/07/02/economy/us-tariffs-on-eu/index.html [7/2/19]
CHART CITATIONS:
quotes.wsj.com/index/SPX/historical-prices [7/5/19]
quotes.wsj.com/index/DJIA/historical-prices [7/5/19]
quotes.wsj.com/index/COMP/historical-prices [7/5/19]
tradingview.com/markets/indices/quotes-us/ [7/5/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019 [7/5/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [7/5/19]