Stocks were little changed last week, as the S&P 500 fell by just 0.08 percent to 2,905.03. That left the benchmark index up 15.88 percent 2019-to-date, and only 0.88 percent below the all-time closing high hit last September. Trading volumes were lower than normal due to the Easter holiday, but overall stocks continued to hold up remarkably well considering how sharp the bounce has been off of December’s panic lows. In the previous Kickstart we learned that institutional traders remain cautiously optimistic about equities even after the V-shaped rebound, and a new Allianz survey suggests that a similar sentiment is shared by retail investors.
Specifically, 52 percent of respondents said that they feel confident the stock market will grow 5 percent or more in 2019, far from unreasonable given that most major indices are already up double digits through the first four months of the year. At the same time, more than four in ten surveyed investors said they are worried “a major recession or big market crash are on the horizon.” Allianz’s Kelly LaVigne added that “This juxtaposition in attitudes may be attributed to the fact that, despite ongoing volatility in the short-term, the market is still in the longest bull market run ever. But people are wondering how long the good times will last.” Surveyed Millennials were noticeably more concerned about an impending economic recession and stock market downturn than Gen-X and Baby Boomer respondents. One potential explanation for this is that many Gen-Y investors probably started participating in the market during or just after the 2007-2008 global financial crisis and related “Great Recession.” Memories of that volatile period are likely still front and center in their minds, whereas older investors with more experience better understand that equities may undergo bullish and bearish cycles but in the long run are a powerful tool for growing a retirement nest egg.
To recap a few of the things we learned about the economy last week, the positives included that the nation’s trade deficit narrowed, homebuilder confidence firmed, home purchase applications increased, retail sales jumped, and the number of Americans making first-time claims for unemployment benefits slid to the lowest level since 1969. As for the negatives, housing start declined, building authorizations slumped, industrial production unexpectedly fell, capacity utilization eased, and gauges of regional manufacturing activity continued to send mixed signals. This week the pace of economic data slows down slightly but there are still a few important reports on housing, factory output, and consumers scheduled to be released, along with the government’s first official estimate of U.S. gross domestic product (GDP) growth for Q1 2019 due out on Friday.
**A more detailed snapshot of the U.S. economy can be found here.**
What To Watch:
- Existing Home Sales 10:00 AM ET
- FHFA House Price Index 9:00 AM ET
- New Home Sales 10:00 AM ET
- Richmond Fed Manufacturing Index 10:00 AM ET
- 2-Yr Note Auction 1:00 PM ET
- MBA Mortgage Applications 7:00 AM ET
- EIA Petroleum Status Report 10:30 AM ET
- 2-Yr FRN Note Auction 11:30 AM ET
- 5-Yr Note Auction 1:00 PM ET
- Durable Goods Orders 8:30 AM ET
- Jobless Claims 8:30 AM ET
- EIA Natural Gas Report 10:30 AM ET
- Kansas City Fed Manufacturing Index 11:00 AM ET
- 7-Yr Note Auction 1:00 PM ET
Sources: Econoday, Allianz, FRBSL
Post author: Charles Couch