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Week in Review 1.31.2020
February 3, 2020
Week in Review
Week Ending: Friday, January 31, 2020
Recap & Commentary
After 57 years, Friday, January 31 marked the UK’s final day as a member of the EU. Now that the UK has left, the difficult work of negotiating multiple trade, travel, and business agreements must begin. UK PM Boris Johnson has stated that he would like to have all such deals finalized by year end. Many experts doubt whether such complex negotiations can be completed in such a relatively short period of time.
As expected the Federal Reserve voted to leave rates unchanged following the conclusion of its January meeting. Current market expectations are for the Fed to cut rates at least twice in 2020.
Through Friday, 225 S&P 500 companies had reported fourth quarter earnings. Thus far, 69% of companies have beaten their earnings estimate. Full-quarter earnings growth is currently forecasted to be -0.3%.
Economic Bullet Points
New Homes Sales dipped -0.4% in December, which ran contrary to the consensus expectation of a 1.5% gain. Additionally, the previous three months were revised down by a total of 32,000 units. However, on an average annual basis, new home sales rose 10.3% in 2019, the highest level since 2007, led by double-digit gains in the South and West regions.
Consumer Confidence—The Conference Board’s Consumer Confidence Index increased 3.4 points in January to 131.6, above the consensus expectation of 128.0. While off its cycle peak, the index is still elevated and close to its highest level in nearly two decades. It continues to support a positive outlook for consumer spending growth and the broader economy in 2020.
Of Note
Market Indices Week of 1/31
S&P 500 | -2.1% |
Small Caps | -2.9% |
Intl. Developed | -2.5% |
Intl. Emerging | -5.1% |
Commodities | -3.2% |
U.S. Bond Market | 0.6% |
10-Year Treas. Yield | 1.50% |
US Dollar | -0.5% |
WTI Oil ($/bl) | $52 |
Gold ($/oz) | $1,587 |
The Week Ahead
- ISM Manufacturing
- ISM Services
- Factory Orders
- Trade Balance
- Non Farm Employment.
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