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Weekly Market Commentary

Market Recap Week ending 3.8.19

-Darren Leavitt, CFA

Economic growth concerns along with the inability of the S&P 500 to maintain a key technical level hobbled the market last week.  The market lost ground for five consecutive days.  For the week, the S&P 500 and Dow lost -2.2% while the NASDAQ gave up -2.5% and the Russell 2000 fell -4.3%.  Treasuries were bid higher as investors sought safe haven assets.  The 2-year yield decreased 11 basis points and closed at 2.44% while the 10-year shed 13 basis points and closed at 2.63%.  There were no changes to our models last week.

Weak economic outlooks took hold of investors last week. The European central bank cut its forecast for 2019 GDP to 1.1% from its December estimate of 1.7%.  The ECB also announced that there would be no further rate hikes in 2019 and that they would introduce a targeted long-term refinancing operation later in the year.  Additionally, the Organization for Economic Cooperation and Development reduced its outlook for global GDP to 3.3% from 3.5%.  These forecasts were also accompanied by some weak economic data.  China Export data was especially ugly with February data showing a decline of 20%.  The Employment Situation report in the US also turned heads as the headline, Non-farm payrolls came in at 20k which was well below estimates.  However, the overall report did show a drop in the unemployment rate and a nice uptick in average hourly earnings.  The Beige book revealed slight to moderate growth in 10 of 12 districts.  It was certainly a week of half empty sentiment.  That said, the ISM non-manufacturing data looked pretty good at 59.7 versus the estimate of 57.2- the new orders component was especially encouraging.

Technically the market has run into a very heavy line of resistance at just above 2800.  The S&P was bought up to the level but has failed there and now given up its 200-day moving average.  The market has been overbought and probably needs to come back a bit- 2600 seems like an interesting level, and the market will likely find some key technical support there.

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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