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  • US Stock Markets Ended January 4, 2019

 
Equities closed the New Year holiday shortened week positive, after the S&P 500 Index was up 0.78%. Equities stumbled to start last week after poor economic numbers from China and Europe, as well as weak ISM data from the US. On Friday, U.S. December non-farm payroll data had a large upside surprise with 312k new jobs, while expectations were 184k. Further, Fed Chair Powell indicated a more flexible approach to rate raises in 2019. This was welcomed news and combined with the FOMC expectations of only 2 rate raises this year, down from 3, helped equities soar as the S&P 500 Index was up over 3.3% Friday. Bristol-Myers Squibb Co. agreed to acquire Celgene Corp. for $50 in cash and a share of the combined company. The combined company, with a market cap over $150b, would be the fourth largest pharma company behind Johnson & Johnson, Pfizer Inc. and Merck & Co. Apple Inc. ushered shares lower after reducing their sales guidance from $89b-$93b down to $84b for 1st quarter 2019. The hardware behemoth cited demand issues in China as the main reason for the reduction. Overall, shares fell nearly 9% on Thursday but did recover nearly 3.5% on Friday. Naturally the poor Apple expectations rippled through their parts suppliers as Skyworks Solutions Inc. and Broadcom Inc. both were over 8% lower Thursday. Despite the bearishness that has befallen equity markets, if job and corporate profit data remain strong, as well as GDP growth and consumer spending this might point to a rebound in equities and provide a firmer growth catalyst going forward.
Posted on Monday, January 7, 2019 @ 8:08 AM
Posts are prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.