Weekly Market Update | May 26, 2020

Markets React to Positive Outlook

The Week on Wall Street

Upbeat comments by the Federal Reserve Chairman and more signs of an economic turnaround combined to help fuel a powerful rally in the stock market last week.

The Dow Jones Industrial Average rose 3.29%, while the Standard & Poor’s 500 advanced 3.20%. The Nasdaq Composite index climbed 3.44% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.87%.

Stocks Cheer Fed Support

The markets surged higher to open the week, buoyed by a Sunday night “60 Minutes” interview with Fed Chair Jerome Powell, who said that the Federal Reserve would do everything necessary to support economic recovery. Rising oil prices and more states lifting restrictions added to the overall improving investor outlook.

After a day digesting those gains, stocks moved another leg higher on strong earnings from big retailers and growing optimism over the global economic recovery. Stocks drifted in the final two days of trading as investors worried about heightening tensions between the U.S. and China.

Different Views on the Economic Recovery

Treasury Secretary Steven Mnuchin and Fed Chair Powell testified last week before the Senate Banking Committee, providing Senators with two different views of the nation’s economic outlook.

Secretary Mnuchin suggested a wait-and-see approach before moving ahead with additional fiscal measures. He wants to pause new spending in order to first assess the impact of the already-approved stimulus program. He believes that the economy will experience a “V-shaped” recovery.

Fed Chair Powell, on the other hand, expressed worries that waiting too long for additional fiscal measures may hamper the fragile economic recovery. It was the third time in a week that the Fed Chair suggested more federal spending is needed to help the economic recovery.

Final Thoughts

One of the challenges of assessing the U.S. economy using certain government reports, like the consumer price index or the employment report, is that they are considered “lag indicators.” Lag indicators provide good insight into where we’ve been, but are less helpful in looking at the current state of economic activity.

Looking at some “real-time” data can help investors better assess the here-and-now. For example, gasoline deliveries are trending higher, consumer confidence appears to have stabilized, and airlines are seeing more bookings. Even the supply of toilet paper seems less of a concern these days, with Google searches falling to near normal levels.

Key Economic Data

Tuesday: Consumer Confidence. New Home Sales.

Thursday: Jobless Claims. Durable Goods Orders. Gross Domestic Product (GDP).

 Source: MarketWatch Calendar

Companies Reporting Earnings

Tuesday: Autozone (AZO)

Wednesday: HP (HPQ), Workday (WDAY), Autodesk (ADSK)

Friday: Salesforce.com (CRM), Costco (COST), Trip.com (TCOM), Okta (OKTA), Dollar General (DG), Dell Technologies (DELL), VMware (VMW)

Source:Zacks.com

Quote of the Week

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.”

– Eleanor Roosevelt

Sources: The Wall Street Journal, May 22, 2020; Treasury.gov, May 22, 2020

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. Weekly performance for the Dow Jones Industrial Average, Standard & Poor’s 500 index, and NASDAQ Composite is measured from the close of trading Friday, May 15 to the Friday May 22 close. Weekly performance for the MSCI-EAFE is measured from the Friday May 15 open to the Thursday May 21 close. U.S. Treasury Notes are guaranteed by federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it might be worth more or less than the original price paid.  Weekly and year-to-date 10-year Treasury note yields are expressed in basis points.  International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Protecting Your Skin from the Sun

This month is Melanoma/Skin Cancer Detection and Prevention Month. Nearly all of us know the dangers of too much sun exposure, but given the recent trend to enjoy the great outdoors to break up the monotony of quarantine, many of us may be getting more sun exposure than we’ve ever had. Below are some tips to help reduce the risk of melanoma and other forms of skin cancer. Just don’t forget: this tip isn’t a replacement for medical advice from your health care provider. Be sure to reach out to them before making any changes that may affect your health. Now, onward!

Tip #1 – Sunscreen. Wear daily and apply often. Broad spectrum, which protects against UVA and UVB rays, is preferred.

Tip #2 – Protective Clothing. Wear hats, sunglasses, and other items to reduce sun exposure. Stay inside midday when the sun’s rays are the strongest.

Tip #3 – Avoid Tanning beds. They can increase melanoma risk up by 75%.

Tip #4 – Protect your children. One bad sunburn doubles their future risk of developing melanoma.

Enjoy your summer living. Just make sure to be smart and safe out there.

Tip adapted from Melanoma Research Alliance

Vegetarian Chili

Serves: 6-8

Ingredients:

  • 1 Tbsp. extra virgin olive oil
  • 1 onion, chopped
  • 1 bell pepper, chopped
  • 2 carrots, peeled and grated
  • 3 cloves garlic, minced
  • 1 jalapeño, chopped
  • 1 Tbsp. tomato paste
  • 1 15.5 oz. can pinto beans, drained and rinsed
  • 1 15.5 oz. can black beans, drained and rinsed
  • 1 15.5 oz. can kidney beans, drained and rinsed
  • 1 28 oz. can fire roasted tomatoes
  • 3 cups vegetable broth
  • 2 Tbsp. chili powder
  • 1 Tbsp. cumin
  • 2 tsp. oregano
  • 1 tsp. cayenne pepper
  • 1 tsp. salt
  • 1 tsp. black pepper

Directions:

  1. Heat oil over medium heat in a large pot.
  2. Add onion, bell pepper, and carrots; sauté until soft.
  3. Add garlic and jalapeño and cook for one minute.
  4. Add tomato paste and stir well.
  5. Add tomatoes, beans, broth, chili powder, cumin, oregano, cayenne pepper, salt, and pepper.
  6. Bring to a boil.
  7. Reduce heat and simmer for one half hour.
  8. Serving options: grated cheese, sour cream, or your favorite hot sauce.

Recipe adapted from delish.com

Moving On After a Poor Shot

No one addresses the ball with the assumption that they’ll hit a bad shot. As golfers, we are told to visualize a good outcome, and often, the ball does more or less what we want it to do. When things go wrong, the way we react reveals our character, and maybe even our golfing ability.

We have all played with a club slammer or a club thrower. We have all seen the agonizer or brooder who is still thinking about what happened on the third tee on the seventh green. Pros learn to keep an even keel, and move on from a miss; follow their example. Your next shot just might be great.

Tip adapted from Maderas Golf

Protecting Your Data

These days, you can do almost anything online, including filing taxes. That can sometimes mean being more vulnerable to security compromises, such as a breach of data or identity theft. Here are tips for keeping your data safe.

  • Always use security software with firewall and anti-virus protections. Make sure your security software is always on and set to automatically update. You may want to go so far as to encrypt sensitive files such as tax records you store on your computer.
  • Learn to recognize and avoid phishing emails, threatening calls, and texts from thieves posing as legitimate organizations such as your bank, credit card company and even the IRS. Do not click on links or download attachments from unknown or suspicious emails.
  • Protect your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure. Shop at reputable online retailers. Treat your personal information like you do your cash; don’t leave it lying around.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov

Using Up Kitchen Odds and Ends

Spring is in full swing, and summer is on the way, which means there’s lots of fresh produce in your kitchen. Here are a few tips to make sure that none of it goes to waste.

Have leftover bones from BBQs or shrimp shells? These can be frozen and then turned into delicious homemade stock for broths and soups. Homemade soup stock is also a delicious way to season rice; simply substitute the water for the stock.

Fresh fruit that’s on its last legs make for great smoothies. Save some of the bananas that are past their prime by turning them into yummy loaves of banana bread.

Tip adapted from RealSimple.com

Financial planning and investment advisory services offered through Cleveland Wealth, LLC, a Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified wealth advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.