By Chris Perras, CIO
The S&P 500 was flat last week, but is up 16% year-to-date on ebbing recession fears, as the U.S. economy is showing signs of rebounding after slowing at the turn of the year. The idea that the U.S. and China are converging on a trade deal by the summer has helped sentiment and stocks. We are back to flat with late last September around 2900 on the SP500.
Oil prices are up 2.4% to $65.5 on reports that the U.S. government will end sanctions waivers for some countries, including China, that are still importing oil from Iran.
Pepsi reported earnings last week that were well received, and it hit a new all-time high of $127.5/s. OHFG maintains a favorable outlook for the stock. Johnson and Johnson, reported stellar EPS as well, however it ended the week flat as the whole healthcare sector was hit hard by on-going Democratic presidential candidates call for socialist style “Medicare for all” healthcare.
JP Morgan and Morgan Stanley both reported better than expected EPS that were well rewarded by investors. OHFG expects financials to be a strong performer in the 2nd half of 2019, and will position our equity portfolio accordingly over the next 2-3 months. We believe there is value there now, as other investors have given up on the group. The team at OHFG continues to look for a second half 2019 acceleration in the global economy.
We continue to believe that the 2h2019 and 2020 will be much more positive than others are forecasting. We will use potential second quarter weakness in stocks and strength in bonds to continue to shift positions toward a second half acceleration in the economy and stock market. We will be posting our outlook closer to mid-year but expect us to continue to make some adjustments in advance of the second half. Until the 2h2019, “Rotation Nation” will be the general rule.
Our first half 2019 market outlook and commentary can be found at https://oakharvestfg.com/2019-first-half-outlook/.
Sources for data include Bloomberg, Investor’s Business Daily, and other publicly available news sources. Weekly market updates contain general information and the views of Oak Harvest Investment Services. Content should not be regarded as personalized investment advice. Views and opinions expressed may change without notice. In addition, Oak Harvest makes no assurance as to the accuracy of any forecast made. Past performance is not indicative of future results. Investing involves the risk of loss.