Weekly Market Commentary

Market Recap Week ending 4/26/19

-Darren Leavitt, CFA

The broader indices inked new all-time highs last week as Microsoft, Facebook, and Amazon all posted better than expected earnings.  The S&P gained 1.2% but was outpaced by the Nasdaq and Russell 2000 which posted gains of 1.9% and 1.6%, respectively.  However, the Dow struggled as key components MMM, Intel, and Exxon Mobile missed on earnings and or lowered estimates for the coming year.  The yield curve steepened last week with the 2-year closing down 11 basis points to yield 2.27%, the 10-year shed 5 basis points to close at 2.51%.

US equities and Bonds were also helped by better than expected economic data.  Q1 GDP increased at an annual rate of 3.2% well ahead of the consensus estimate of 1.9%.  The report was accompanied with the GDP Price Deflator which came in at 0.9% lower than the consensus estimate of 1.4%.   Nice growth without inflation put the goldilocks scenario in play and gave investors more reason to buy.  Additionally, better than expected New Home Sales, Consumer Sentiment, and Durable Goods Orders also helped investor sentiment.

The strength of the US economic data provided quite a contrast from than the international economic data released last week.  For instance, South Korea GDP missed the mark, the German IFO Business Climate Index indicated it was still in decline, and the Bank of Japan indicated that it would keep its rates low until at least 2020 on growth concerns.  The international data coupled with cautious commentary from multinationals such as Intel and MMM on their outlook for China warrants some concern but perhaps brings another set of buyers to the US markets namely foreigners who seek higher yields and better economic growth prospects here in the US.  There were no changes to our models last week.

The information in this Market Commentary is for general informational and educational purposes only. Unless otherwise stated, all information and opinion contained in these materials were produced by Foundations Investment Advisers, LLC (“FIA”) and other publicly available sources believed to be accurate and reliable.  No representations are made by FIA or its affiliates as to the informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. No party, including but not limited to, FIA and its affiliates, assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

The views and opinions expressed are those of the authors do not necessarily reflect the official policy or position of FIA or its affiliates.  Information presented is believed to be current, but may change at any time and without notice.  It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Investment advisory services are offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

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