Market Ethos - Feb 2nd, 2019

- Prepared by: Justin Groff - Ivey MSc 2020

Week in Review:

The market seems to be as frozen as us Ivey students this week, with the VIX end the month of January at a low of 16.57.



Source: Yahoo Finance

Despite FX markets, futures, and commodities prices all trending relatively flat this week, there was plenty of activity with regard to tech earnings reports. Big names such as Facebook, Apple, Microsoft and Tesla all reported this week, and were all relatively positive. The communications services sector surged 3.74% following these earnings, leading gains among the eleven S&P 500 sectors.


The S&P 500 as a whole reaped the benefits of this momentum in tech, posting the best monthly performance since October 2015. Moreover, the S&P’s 7.9% growth this month is actually the best January since 1987. The index posted 27 new 52-week highs without a single new low. This just goes to show that while volatility may remain at an all time low, some areas of the market are still in full swing.


Stocks to Watch:

Facebook rose more than 10% after beating estimates and generating nearly $17-billion in revenue this past quarter. The social media platform now boasts more than 2-billion users after experiencing strong core product growth.

2019 seems to be positive for Apple relative to its poor performance at the end of last year. The tech giant was trading up after recording $10.9 billion in revenue from services and strong growth of 50% in its wearable products (Apple Watch, Airpods, etc.). Apple will have to continue to find alternatives to the IPhone to extend this rebound.

Microsoft reported following market close on Jan. 30th. While most projections were met, concerns regarding company’s personal computers and its Azure cloud computing sent the share price marginally lower.

General Electric jumped 11.65% after the company posted better than expected quarterly sales and revenue growth.


Recommended Reading:

Capital Markets:

Asia stocks set for muted start as rally eases: markets wrap

https://www.bloomberg.com/news/articles/2019-01-31/asia-stocks-set-for-muted-start-as-rally-eases-markets-wrap?srnd=premium-canada

S&P 500’s best month since 2015 ends on a high note

https://www.reuters.com/article/us-usa-stocks/sp-500s-best-month-since-2015-ends-on-a-high-note-idUSKCN1PP1NP

Technology:

Apple outlook suggests stability after a tough end to 2018 https://www.bnnbloomberg.ca/apple-outlook-suggests-stability-after-a-tough-end-to-2018-1.1205999

Economics:

U.K. Parliament rips up Brexit deal, sends May back to talks https://www.bnnbloomberg.ca/u-k-parliament-rips-up-brexit-deal-sends-may-back-to-talks-1.1205788

U.S., China face deep trade, IP differences in high-level talks

https://www.reuters.com/article/us-usa-trade-china/u-s-china-face-deep-trade-ip-differences-in-high-level-talks-idUSKCN1PO05M

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