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Market Recap week ending 4.18.19

-Darren Leavitt, CFA

The holiday-shortened week was an interesting one but produced a mixed bag of results for the major indices.  The S&P 500 lost 0.1% on the week while the Russell 2000 lost 1.4%.  The Dow outperformed with a gain of 0.7%, and the NASDAQ tacked on 0.2%. US Treasuries were essentially flat last week with the 2-year yield closing down one basis point at 2.38% and the 10-year yield unchanged at 2.56%.  Oil was little changed closing up a bit at $64.03 a barrel.  Gold lost $20 on the week to close at 1275.85/oz.  There were no changes to our models last week.

Despite the rather anemic moves in the market last week, there was plenty of information for investors to contemplate.  Corporate earnings on the margin appeared better than expected and produced nice moves in the industrial and transportation sectors.  Financials had mixed results but bounced later in the week after a rough start.

On the corporate news front, semiconductors continued to do well and took favorably to the announcement that Qualcomm and Apple had finally resolved their longstanding dispute on patent infringement.  The announcement sent shares of Qualcomm soaring.  Intel also had a nice move after the company announced that it would no longer participate in the 5G modem market.  On the other hand, the Healthcare sector continued to struggle on concerns related to the political focus on the high cost of healthcare and this focus will likely put many of these companies in the crosshairs of political rhetoric.  Two high profile IPOs also came to market last week and had very impressive gains on their debuts.  Zoom Video (ZM) priced at $36 and closed 72% higher at $62.  Pinterest (PINS) priced at $19 and closed 28% higher at $24.40.

There were a couple of economic data points announced last week worth mentioning.  First, there were better than expected GDP numbers out of China.  Q1 GDP increased 1.4% quarter over quarter, growing 6.4% year over year, which was a bit better than the 6.3% expectation.  It appears that the stimulus that the Chinese have been putting into their market is getting some traction from the last few economic reports.  In the US, March Retail Sales stood out.  The 1.6% gain was much better than the 0.9% that had been expected and seemed to refute the poor showing in the prior months.  Additionally, Initial Claims, a leading indicator, were down 5000 to 192,000- the lowest reading since September of 1969!

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