The Week on Wall Street
Stocks fell sharply last week as Wall Street considered
how the coronavirus outbreak might influence global business activity and household
spending.
The selloff became a correction for the U.S. markets. The S&P 500 retreated
11.49%; the Dow Jones Industrial Average, 12.36%; the Nasdaq Composite, 10.54%. The MSCI EAFE,
tracking developed stock markets outside North America, had fallen 6.75% week-over-week by Friday's
closing bell.
On Friday afternoon, Federal Reserve Chair Jerome Powell stated that central bank
officials were willing to "use our tools and act as appropriate to support the
economy."[1][2][3]
Strong Consumer Confidence, Plus a Boost for
Incomes
A trio of economic indicators pertaining to U.S. households looked solid last
week. The Conference Board's Consumer Confidence Index notched consecutive months above 130 for the
first time since July-August 2019, posting a 130.7 February mark. The University of Michigan's final
February Consumer Sentiment Index came in at 101.0, ticking up from a preliminary 100.9.
Friday, the Department of Commerce reported that Americans increased their personal
spending by 0.2% in January, while personal incomes improved
0.6%.[4][5]
Buyers Have Flocked to New Homes
New home
sales, according to the Census Bureau, improved 7.9% in January; the annualized pace of new home
buying was the best seen since July 2007. Year-over-year, sales were up 18.6%. Housing market analysts
cited a favorable economy and favorable weather as factors.[6]
Final
Thought
Right now, there is no forecast for how the coronavirus outbreak may affect
consumer demand or supply chains. The impact may not be known for months. But remember, your
investment strategy should reflect your risk tolerance, time horizon, and goals, and it also should
take into consideration periods of market volatility. Fear is driving decisions in the financial
markets. Nobody would blame you if this uncertainty gave you a bit of anxiety as
well.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: The
Institute for Supply Management's latest factory activity index
arrives.
Wednesday: Automatic Data Processing (ADP) publishes its February
private payrolls report, and ISM's index of February service-sector business activity appears.
Friday: The Department of Labor presents its February employment
report.
Source: MarketWatch, February 28, 2020
The MarketWatch
economic calendar lists 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: AutoZone (AZO), Ross Stores (ROST), Target
(TGT)
Thursday: Costco (COST), Kroger (KR)
Source: Zacks,
February 28, 2020
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
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The Standard & Poor's 500
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The Dow Jones Industrial Average is a price-weighted average of 30
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