NOT SELLING ENOUGH KETCHUP: As you will see below, stocks advanced last week, but it would have been better had it not been for a 30% drop in Kraft Heinz. After reporting a significant drop in earnings followed by the announcement of an SEC investigation into its accounting, the stock price plummeted. There are a myriad of stories circulating describing what led to this collapse in earnings. The most common theme seems to be that after Kraft and Heinz merged, the primary focus of the combined company was cost cutting. This when the food industry was seeing a sharp trend in healthier foods, a trend Kraft Heinz was not following. Now it’s got some catching up to do (get it?).
INTERNATIONAL STOCKS LEAD A GLOBAL ADVANCE: Last week, U.S. and global stocks advanced, with international stocks leading the way. Once again, U.S./China trade relations was a catalyst. Negotiations continued between the world’s two largest economies, and President Trump stated that the U.S. might not hold China to the planned increase in tariffs next month, saying it is “not a magical date.” Across the globe, despite mixed to negative economic growth data, the perception that the U.S. Federal Reserve Bank is finished with raising rates is sparking a rally in stocks. If the Fed pauses in rate raising, then it gives central banks across the globe more flexibility to ease up as well. Investors like that, and markets rose.
CORPORATE EARNINGS: With 82% of S&P 500 companies reporting their fourth quarter earnings, profits are up more than 16% from a year ago. 70% of earnings reports have been ahead of consensus expectations.
THE RICH (COLLEGES) GET RICHER: Donations to U.S. colleges and universities were more than $46 billion total during the last academic year. The top ten recipients received 18% of all giving. Harvard alone received $1.42 billion in donations.
CORPORATE EARNINGS: https://horsesmouth.com/2019-s-sharp-market-rebound
INTERNATIONAL STOCKS LEAD A GLOBAL ADVANCE: https://www.wsj.com/articles/stock-investors-look-past-gloomy-trade-data-11550641430
THE RICH (COLLEGES) GET RICHER: https://www.foxbusiness.com/personal-finance/college-donations-skyrocket-amid-tax-law-changes