Look for the Weekly Economic Update for the previous week every Monday. Click to download, and scroll to bottom of page for a plain-text version of this week's Economic Update.
Monthly and Quarterly Updates come out during the first week of each period and cover the previous period.
Sign up to receive our Economic Updates Here. You may unsubscribe at any time.
(Click on the pdf above to see the full report)
May 18, 2020
In this week’s recap: Powell paints a somber picture for recovery, and the markets slip in reaction.
THE WEEK ON WALL STREET
Stocks drifted lower last week, weighed down by Federal Reserve Chairman Jerome Powell’s unsettling comments on the economy and signs of renewed tensions with China.
The Dow Jones Industrial Average fell 2.65%, while the Standard & Poor’s 500 retreated 2.26%. The Nasdaq Composite Index slipped 1.17% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, slid 3.66%.1,2,3
STOCKS PULL BACK
Stocks moved lower throughout most of last week on worries that the emerging economic reopening might accelerate the spread of COVID-19. Comments by Fed Chair Powell added to the downside pressure when he expressed concern about the path ahead for the U.S. economy.
The stock market managed to find some firmer footing, posting a strong gain on Thursday. Stocks rallied again on Friday, overcoming headlines that suggested a souring relationship with China and a report that showed U.S. retail sales had dropped 16.4% in April.4
Fed Chair Powell spoke last Wednesday and painted a somber economic outlook, remarking that “the path ahead is highly uncertain and subject to significant downside risks.” He urged the White House and Congress to pass additional financial relief to help the economic recovery, adding that there was no plan on the Fed’s part to cut the federal funds rate to below zero.5
Powell also referenced internal Fed research that found those least able to weather the current economic environment were most impacted, with nearly 40% of households making less than $40,000 per year having lost a job in March.6
All written content on this newsletter is for information purposes only. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Basile Financial Group, Inc. a Registered Investment Advisor in the States of Florida, New York and Colorado. Tax services are offered through Business Financial Solutions, Inc. an affiliated company. The presence of this newsletter shall in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the States of Florida, New York and Colorado or where otherwise legally permitted. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.
This material was prepared by MarketingPro, Inc., and 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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other
metals trade. 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. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. 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.
1 – The Wall Street Journal, May 15, 2020 2 – The Wall Street Journal, May 15, 2020 3 – The Wall Street Journal, May 15, 2020 4 – CNBC.com, May 15, 2020 5 – The Wall Street Journal, May 13, 2020 6 – The Wall Street Journal, May 13, 2020
The Wall Street Journal, May 15, 2020 The Wall Street Journal, May 15, 2020 Treasury.gov, May 15, 2020