Investment Commentary – April 18, 2017
Market Indices as of Market Close April 18, 2017
• Dow 20,636 (5.12% YTD)
• S&P 2,349 (5.54% YTD)
• NASDAQ 5,856 (8.80% YTD)
• Gold $1,284 (11.62%)
• OIL $52.65 (-6.60%)
• US 10Y Treasury 2.29 (-26.98%)
• Barclay Bond Aggregate (1.06% YTD)
U.S. stocks closer lower as Goldman, J&J disappoint with their results
U.S. stocks closed lower on Tuesday, pressured after a number of key companies disappointed with their quarterly results, renewing concerns that the market’s valuation may not be supported by economic activity. The Dow Jones Industrial Average DJIA, -0.55% fell 113 points, or 0.6%, to 20,524. The S&P 500 SPX, -0.29% lost 6.8 points to 2,342, a drop of 0.3%. The Nasdaq Composite Index COMP, -0.12% fell 7 points to 5,849, a drop of 0.1%. Among the biggest drags on the day was Goldman Sachs Group Inc. GS, -0.27% which fell 4.7% after its results fell short of analyst forecasts. Johnson & Johnson JNJ, -3.10% lost 3.1%; the company posted a drop in sales in the first quarter. Both are Dow components, accounting for the outsized loss in the blue-chip average.
Oil slides more after U.S. settlement on API inventory report
Oil prices fell on Tuesday then slid more in post-settlement trade after an industry group reported that U.S. crude stockpiles fell less than expected in the latest week while gasoline stockpiles grew unseasonably.
U.S. crude prices were down more than 1 percent at $52.32 a barrel in post-settlement trade after the American Petroleum Institute released its weekly data, indicating that crude stockpiles declined less than analysts had forecast.
Oil futures fell during the trading session, touching their lowest in 11 days as the U.S. government reported that shale oil output in May was expected to post the biggest monthly increase in more than two years.
LEADERS & LAGGARDS:
Utilities and consumer goods were among the leaders this past week while conglomerates and basic materials were among the laggards.
Market moving headlines
GLOBAL CONCERNS: Geopolitical risks grew during the week, and analysts cited those issues as a key negative catalyst in global equity markets. Tensions remained high in Syria and North Korea, and U.S. Secretary of State Rex Tillerson made his first official trip to Moscow to meet with Russian leaders.
EARNINGS KICKOFF: U.S. stock indexes barely moved on Monday and Tuesday, then fell on Wednesday and Thursday in a holiday-shortened trading week that concluded with the release of first-quarter earnings reports from major U.S. banks.
CONSUMER OPTIMISM: A gauge of U.S. consumer sentiment rose again in April, extending a climb since the presidential election last November.
CHINA TRADE: China’s export growth accelerated in March, a positive sign for global demand, while import growth cooled.
THIS DAY IN FINANCAL HISTORY U.S. Abandons Gold Standard
The gold standard, which directly linked the American dollar to its worth in gold, was abandoned on this day during the Great Depression. Today, no currency in the world is redeemable for its worth in gold, as was once the standard.
On tap for the rest of the week:
Thursday: The Conference Board Leading Economic Index for the U.S.
Friday: Existing home sales, National Association of Realtors
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.