Strong performance in the theaters translates into strong performance in the stock market while tension builds with Russia and China gets a boost. Get all the details in this edition of Steady Investor’s Week…
Blockbuster Returns? – The U.S. consumer makes up nearly two-thirds of the domestic economy, and we’ve been spending healthily throughout this economic expansion. One area that has experienced particular strength in spending is at the box office. Americans love nights out at the movies, and it shows in the numbers. Through April 9, the U.S. box office is up 5.5% to $3.198 billion which tops estimates from most media analysts. Some notables that are raking in these profits are Disney and Fox, both of whom have movies grossing in the hundreds of millions in theatres now. Fox and Dreamworks Animation have Boss Baby which took-in $26.3M over the weekend and now stands at close to $90M since its debut; and Disney has Beauty and the Beast which grossed $25M over the weekend and moved it closer to selling $1B worldwide. Next weekend it will be Universal’s turn to shine with The Fate of the Furious, which is expected to gross some $100M for its opening weekend. Strong performance in the theatres has translated to strong performance in the stock market, too. Each of the aforementioned companies is widely outperforming the broader S&P 500 over the last five years.
Parsing a Janet Yellen Speech for Clues – investors are generally eager to parse the Federal Reserve Chairwoman’s speeches for clues, but doing so rarely generates material findings. This time was no different, as she innocuously referred to the economy as being in fine shape and said that interest rates should continue to normalize as the economy improves, but that the “neutral” place for interest rates to end up in this rate cycle is “pretty low.” This information was based on a speech she gave last week at the University of Michigan, but it did nothing to indicate how many times the Fed would raise rates and how far.
Investors Turning Skittish? – markets were negative last week as the geopolitical situation took many turns. Tension is building with Russia as the U.S. fired missiles on a Syrian air base and followed up this week by accusing Russia of being complicit – and perhaps even covering up – Syrian leader Bashar al Assad’s use of chemical weapons. Tension is also building in the Korean peninsula as the U.S. attempts to leverage trade terms with China in exchange for intervention against North Korea’s nuclear program. There are a lot of moving parts for the Trump administration and Secretary of State Rex Tillerson to manage, and the market is looking for clues on how the foreign policy approach may take shape.
Jobs Numbers – some modest but sturdy jobs numbers were released last week, with total nonfarm payroll employment edging up by 98,000 and the unemployment rate declining to 4.5% in March. Employment increased in professional and business services and in mining, while retail trade lost jobs. The number of unemployed persons declined by 326,000 to 7.2 million.
China Gets a Boost – President Trump met with Chinese leader Xi Jinping over the weekend in Florida, and the two discussed matters ranging from North Korea to trade terms. Nothing of substance was agreed to, however President Trump since the meeting has backed-off his campaign pledge to name China a currency manipulator. The yuan rose on the news, and the good news kept coming as China’s exports reportedly rose at the fastest pace in over two years in March, up 16.4% year over year, with import growth also coming in firm at +20.2% y/y. China’s energy demand in terms of crude oil – which is a good indicator for overall economic activity – also hit a record high of nearly 9.2M barrels/day.
Regardless of what is happening with earnings and the market, ensuring your asset allocations reflect your life-stage, time horizon and risk tolerance is critical to navigating volatility and achieving your investment goals. Investors are clearly looking to do all they can now to protect their nest eggs. Given that, we are providing you with the opportunity to get a free asset allocation recommendation now…click HERE to schedule yours or call us at 1-800-918-3114. And in the meantime, to help you get started, we would like to offer you our Personal Asset Inventory guide free of charge. This guide assists you in effectively planning your financial future by providing an overview of your financial situation. Get started by clicking on the link below….