Weekly Market Update – Oct. 29, 2018

Last Week

  • Global equities entered 10% correction territory after falling 3.8% in a bumpy week, with declines across all major regions. U.S. equities declined 3.9% last week as ongoing headwinds from trade and concerns on Federal Reserve policy becoming too restrictive continued to weigh on equities.
  • Flash manufacturing Purchasing Managers’ Index figures released showed fading growth momentum in Europe with Europe (52.1) and Germany (52.3) both falling about a point below prior levels and the consensus expectations
  • European Central Bank on track to conclude asset purchases. At last Thursday’s meeting, European Central Bank President Mario Draghi noted that the main risk to Europe’s economy involved further escalation of a U.S.-China trade war, but the central bank has enough stimulus if needed to lessen the impact of a growth slowdown.
  • Following a heavy week of earnings reports, 240 S&P 500 companies (48%) have reported results. Aggregate earnings growth (23.4%) and revenue growth (8.7%) on a year-over-year basis remain ahead of consensus expectations.

This Week

  • In addition to Apple (AAPL) and Facebook (FB), companies from a wide variety of sectors will report earnings throughout the week. Companies include Berkshire Hathaway (BRK/B), Coca-Cola (KO), General Electric (GE), Starbucks (SBUX) and Pfizer (PFE).
  • The jobs added figure is expected to improve over September’s hurricane-dampened figure of 134,000 to 193,000. The unemployment rate is expected to remain at 3.7% and wage inflation as measured by average hourly earnings is expected to stabilize at 2.8% year-over-year.
  • The Bank of Japan will conclude its October meeting on Wednesday and is not expected to make a change in monetary policy


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