Monthly Market UpdateSubmitted by Texas Legacy Wealth Management on August 2nd, 2019
We hope that you and your family are enjoying the summer and managing to stay cool! The market has continued to heat up over the last couple of months with a rally of more than 8% for the S&P 500 in June and July. Through the end of July, the index is up about 19% for the year and almost 27% higher than the lows in December, 2018. (YCharts).
Throughout the course of 2019 we’ve kept a close eye on fundamental economic data as well as the ever-present headline risks. While July’s stock market performance was fairly steady, we have seen developments on both fronts.
- Central Bank Policy: As expected, the Federal Reserve cut rates for the first time since 2008. (CNBC) Investors hope that this strategy shift will help extend the decade-long economic expansion.
- Brexit: Boris Johnson became the UK’s prime minister after Theresa May resigned following her failure to deliver an acceptable Brexit deal. The challenges remain for Johnson and the UK as the October 31st Brexit deadline rapidly approaches.
- Trade: President Trump announced an additional 10% tariff on $300 billion of imports from China to take effect on September 1st after a US delegation returned from talks in China with little progress. While tensions are ratcheted up communication lines appear to remain open with talks scheduled to continue in September. (Bloomberg).
Fundamental Economic Data:
- US GDP: US 2nd quarter GDP came in better than expected with growth of 2.1%. The latest data shows steady growth for the first half of 2019 when combined with 1st quarter GDP growth of 3.1%. (Wall Street Journal).
- Earnings: We are currently in the midst of the 2nd quarter earnings season. Through July 26th 44% of companies in the S&P 500 have reported earnings with 77% beating expectations. In aggregate companies have reported earnings that are 5.4% above expectations. (FactSet).
- Consumer Confidence: The consumer appears to remain strong as the Conference Board measure of consumer confidence hit the highest level of the year in July. (Wall Street Journal).
While we continue to keep a close eye on current risks (both economic and headline), we do not see a recession on the near-term horizon, and feel that the market has the potential to move higher from here, although be prepared for the potential of volatility in the months to come. While we believe the economy is unlikely to move into a recession immediately, we do feel that there are increased risks of a recession looking out beyond this year. We will continue to monitor trade developments, central bank policy, political and geo-political risks and will look to make changes to portfolios as we get further clarity on the evolving economic environment.
Your TLWM Team
*Investment advice offered through TLWM, LLC., a registered investment advisor.
*The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
*The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
*Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
*Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
*Past performance does not guarantee future results. Investing involves risk, including loss of principal.
*You cannot invest directly in an index.
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*This document is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Texas Legacy Wealth Management and its representatives are properly licensed or exempt from licensure.
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