Happy New Year from all of us
at Mahoney Asset Management!
U.S. markets experienced more wild sessions last week before ending in positive territory as the recent turbulence continued. In fact, we are currently in the middle of some of the most volatile market performance in more than eight years.1 For the week, the S&P 500 gained 1.86%, the Dow added 1.61%, and the NASDAQ increased 2.34%.2 MSCI EAFE stocks also increased, posting a 1.42% weekly gain.3
While the results may not seem especially dramatic, the path to get there certainly was. On Thursday, January 3, domestic stocks plunged, as factory data and a tech warning spooked investors.4 Apple reported that their sales were below forecast , in part due to the softening of the Chinese economy.
Then, the next day, the S&P 500, Dow, and NASDAQ each gained at least 3.3%.5 Friday’s performance marked one of the largest rallies since the beginning of this bull market.6
What drove the market rally?
Two key events contributed to the huge jumps on Friday: 1) the latest labor report and 2) comments from the Federal Reserve Chairman.7
1.) December’s labor report exceeded projections.
Many people expected that the economy would add around 176,000 jobs last month. Instead, the latest data revealed that the increase was actually 312,000 new jobs in December—drastically beating expectations.8 Not only did last month’s labor report show more jobs added than anticipated, but wage growth and labor market participation also increased.9
Why does this data matter?
Investors have been very concerned that economic growth is slowing. This data helped quell worries that a recession is ahead.10
2.) The Fed shared new policy perspectives.
Fed Chair Jerome Powell told the American Economic Association that the Federal Reserve understands the market’s worries and hasn’t predetermined its future interest rate hikes.11
Why does this update matter?
Some of the uneasiness the markets have shown recently are a result of concerns that the Fed is tightening monetary policy too quickly. Powell’s comments indicate the Fed is sensitive to economic conditions, an update that many investors wanted to hear.12
What is on the horizon?
A number of unresolved situations remain for the markets and economy. The government shutdown continues, and a solution doesn’t appear imminent at the moment. Trade dynamics are also still an important consideration, especially since corporations are now issuing warnings that trade is affecting their profits. Meanwhile, U.S. officials will be meeting with China this week to talk once again.13
For now, the volatility we are experiencing may continue.14 Remember, we’re closely tracking developments to see how they may affect your financial life. If you have questions about how to weather these ups and downs, we are here for you.
Sources
INVESTING RISK DISCLOSURE
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Mahoney Asset Management for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
IMPORTANT CONSUMER INFORMATION
This web site has been prepared solely for informational purposes. It is not an offer to buy or sell any security; nor is it a solicitation of an offer to buy or sell any security.This site and the opinions and information therein are based on sources which we believe to be dependable, but we can not guarantee the accuracy of such information.
Representatives of a broker-dealer or investment adviser may only conduct business in a state if the representatives and the broker-dealer or investment adviser they represent: (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state’s licenser requirements.
An investor may obtain information concerning a broker-dealer, an investment advisor, or a representative of a broker-dealer or an investment advisor, including their licenser status and disciplinary history, by contacting the investor’s state securities law administrator.
SECURITIES: ARE NOT FDIC-INSURED/ARE NOT BANK-GUARANTEED/MAY LOSE VALUE
This information is intended for use only by residents of CA, CT, DC, FL,, MA, MD, MN, NC, NJ, NY, OH, PA, and VA. Securities-related services may not be provided to individuals residing in any state not listed above.
The financial calculator results shown represent analysis and estimates based on the assumptions you have provided, but they do not reflect all relevant elements of your personal situation. The actual effects of your financial decisions may vary significantly from these estimates–so these estimates should not be regarded as predictions, advice, or recommendations. Mahoney Asset Managment does not provide legal or tax advice. Be sure to consult with your own tax and legal advisors before taking any action that would have tax consequences.
Securities offered through
Newbridge Securities Corporation,
member FINRA / SIPC
Investment Advisory Services offered through
Newbridge Financial Services Group Inc.,
an SEC Registered Investment Adviser.
Office of Supervisory Jurisdiction
1200 North Federal Highway, Suite 400
Boca Raton, FL 33432
Toll-Free: 877-447-9625
Phone: 954-334-3450
Fax: 954-489-2390
