Market Digest – Week Ending 4/20 | Personal Capital
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Home>Daily Capital>Investing & Markets>Market Digest – Week Ending 4/20

Market Digest – Week Ending 4/20

[dropcap]M[/dropcap]ostly positive US earnings results more than offset lingering fear over Spanish debt. Yields on newly issued Spanish bonds rose, but demand was stronger than expected. Reinforcing a positive outlook for the global economy, the usually conservative IMF raised its growth forecast for 2012. Stocks finished the week higher while commodities were mixed and bonds little changed.

Weekly Returns

S&P 500: 1,379 (+0.6%)

MSCI EAFE: +2.1%

US 10-Year Treasury Yield: 1.96% (-0.03%)

Gold: $1,642 (-0.8%)

USD/EUR: $1.321 (+1.0%)

Major Events               

  • Monday – US Retail sales for March reported up 0.8%, above expectations.
  • Monday – Spanish 10-year bond yields rose above 6%.
  • Monday – Argentina’s president Cristina Kirchner said she will send a bill to congress to nationalize YPF, the country’s largest oil and gas company. YPF is currently majority owned by Spanish energy giant Repsol YPF.
  • Tuesday – Spain’s short term debt auction attracted greater demand than expected, reducing fears of another debt crisis in the near term.
  • Tuesday – The International Monetary Fund (IMF) increased its global growth forecast for 2012 to 3.5%.
  • Wednesday – Warren Buffed announced he was diagnosed with stage one prostate cancer, but said it was not life threatening.
  • Wednesday – Intel and IBM both announced disappointing sales growth.
  • Thursday – Microsoft announced third quarter earnings beat estimates due to strong corporate demand.
  • Friday – GE announced quarterly profit was up 17% from the prior year, ahead of expectations.
  • Friday – The IMF was rumored to possibly announce a $400 billion boost of funds to deal with the European debt crisis, largely a result of pledges from emerging countries such as China and Brazil.

Our Take

Corporate earnings season is generally off to a strong start. European bond yields continue have more impact on the US market than earnings, and the debt crisis there retains the potential for tremendous disruption. But at the end of the day, quality global corporations continue to increase their intrinsic value – good news for long term investors.

Quietly, Apple dropped 5% this week even as the broader markets rose. We don’t have a specific outlook for the stock, but those with a concentrated position may want to take the opportunity to evaluate how it fits into their goals and broader portfolio. The stock is still up over 40% for the year, so an emotional response to avoid selling below the high may be misguided.

While Argentina doesn’t matter much to the global economy or stock market, the proposal to nationalize YPF was highly disappointing. We are generally of the opinion that government intervention in private markets is a bad thing. The US recently proved that coerced bailouts can be successful, but flat out seizure of property almost always has disastrous implications.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.
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