The Week on Wall Street
Traders assumed that the week's biggest news event
would be Federal Reserve Chairman Jerome Powell's speech at the annual Jackson Hole banking
conference. Instead, China seized the headlines by announcing new tariffs on U.S. goods.
Domestic stocks ended up lower for the week. The Nasdaq Composite fell 1.83%; the S&P 500, 1.44%; the Dow Jones Industrial Average, 0.99%. International stocks posted a weekly gain: the MSCI EAFE benchmark rose 0.96%.[1][2]
Beijing Plans New Tariffs
Friday morning, China's finance ministry stated it
would levy import taxes of 5-10% on an additional $75 billion of American imports. One set of tariffs
is slated to start September 1, targeting U.S. crops, meats, and seafood. A second set, effective
December 15, will put tariffs on U.S.-made cars and car parts. In total, these taxes are scheduled for
more than 5,000 American products.
Friday evening, the White House announced two rounds of 5% increases on existing U.S. tariffs on Chinese goods, to be successively implemented on September 1 and October 1.[3][4]
Powell Reflects at Jackson Hole
Friday, Jerome Powell delivered an address on
monetary policy at the Kansas City Fed's annual Jackson Hole symposium. He noted that the global
economy currently presented a "complex, turbulent picture," and added that the Fed was "carefully
watching developments" and would "act as appropriate."
Investors wonder if the central bank will consider another rate cut at its September meeting. Comments from other Fed officials at Jackson Hole did not indicate a consensus on that matter.[5]
Leading Indicators Rise
The Conference Board, the business research group
known for its monthly Consumer Confidence Index, also publishes a monthly Leading Economic Indicator
(LEI) Index. The Conference Board LEI provides a forward-looking analysis of the health of the
business cycle, looking at ten factors ranging from consumer expectations to stock prices to
construction activity.
In July, the LEI rose 0.5%, following 0.1% descents in May and June. This sudden increase offers optimism at a time when investors are wondering about the momentum of the economy.[6]
Final Thought
Bond prices have risen around the world, leading to lower bond
yields. In some instances, yields have turned negative. While the yield on the 10-year Treasury has
also declined, it is still above 1.5%, notably exceeding the yields of similar-duration bonds in
France, Germany, Spain, and the United Kingdom.[7]
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Conference
Board's July Consumer Confidence Index.
Thursday: The Bureau of Economic
Analysis presents the second estimate of second-quarter economic growth, and the National Association
of Realtors publishes new data on pending home sales.
Friday: July consumer
spending data from the Department of Commerce, and July's final University of Michigan Consumer
Sentiment Index (a gauge of consumer confidence levels).
Source: Econoday / MarketWatch Calendar, August 23, 2019
The Econoday and MarketWatch
economic calendars list upcoming U.S. economic data releases (including key economic indicators),
Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content
is developed from sources believed to be providing accurate information. The forecasts or
forward-looking statements are based on assumptions and may not materialize. The forecasts also are
subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Autodesk
(ADSK)
Thursday: Abercrombie & Fitch (ABF), Best Buy (BBS), Lululemon
Athletica (LULU)
Source: Zacks, August 23, 2019
Companies mentioned are for informational purposes only. It
should not be considered a solicitation for the purchase or sale of the securities. Any investment
should be consistent with your objectives, time frame and risk tolerance. The return and principal
value of investments will fluctuate as market conditions change. When sold, investments may be worth
more or less than their original cost. Companies may reschedule when they report earnings without
notice.
Investing involves risk including the potential loss of principal. No investment strategy can
guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political
instability and may not be suitable for all investors.
The Standard & Poor's 500
(S&P 500) is an unmanaged group of securities considered to be representative of the stock
market in general.
The Dow Jones Industrial Average is a price-weighted average of 30
significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by
Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and
similar securities listed on the NASDAQ stock market and is considered a broad indicator of the
performance of stocks of technology companies and growth companies.
The MSCI EAFE Index
was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the
performance in major international equity markets as represented by 21 major MSCI indices from
Europe, Australia, and Southeast Asia.
The 10-year Treasury Note represents debt owed by
the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower,
investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or
to predict future performance.
Past performance does not guarantee future
results.
You cannot invest directly in an index.
Consult your financial
professional before making any investment decision.
Fixed income investments are subject
to various risks including changes in interest rates, credit quality, inflation risk, market
valuations, prepayments, corporate events, tax ramifications and other factors.
These
are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named
representative, Broker dealer or Investment Advisor and should not be construed as investment
advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax
or legal advice. All information is believed to be from reliable sources; however, we make no
representation as to its completeness or accuracy. Please consult your financial advisor for further
information.
By clicking on these links, you will leave our server, as the links are
located on another server. We have not independently verified the information available through this
link. The link is provided to you as a matter of interest. Please click on the links below to leave
and proceed to the selected site.