It looks like those of us in central Florida dodged a bullet with hurricane Dorian. However, those along the east coast are still not out of the woods and we send you our prayers for an uneventful next few days. If our office can be of any assistance to you, please do not hesitate to reach out.
THE WEEK ON WALL STREET
Fears of an impasse in the U.S.-China trade dispute lessened last week. While additional U.S. tariffs on Chinese imports were scheduled to take effect on September 1, China’s government communicated that it would refrain from taking retaliatory measures for the moment. U.S. stock benchmarks advanced during the week. The S&P 500 rose 2.79% across five trading days, and the Nasdaq Composite and Dow Jones Industrial Average respectively gained 2.72% and 3.02%. The MSCI EAFE international index added just 0.25%.
POSITIVE NEWS IN THE TRADE DISPUTE
Thursday, a spokesman for China’s commerce ministry said that negotiations could resume this month, and that discussions need to focus on “removing the new tariffs to prevent escalation.” In addition, officials in Beijing indicated they would hold off on responding to the U.S. tariff hikes announced Friday by the White House.
MIXED CONSUMER CONFIDENCE SIGNALS
The Conference Board’s monthly Consumer Confidence Index was at 135.1 in August. Analysts polled by Reuters had projected a reading of 129.5. Consumers’ view of the present economic situation was the best since November 2000. On the other hand, the University of Michigan’s monthly Consumer Sentiment Index (based on a different collection of survey data) dropped 8.6 points during August to 89.8; that was its biggest monthly descent in nearly seven years.
After a pause for the Labor Day holiday, U.S. financial markets have an abbreviated trading week. The August jobs report may influence Friday’s Wall Street session, and any news pertaining to U.S.-China trade talks could also influence the markets.
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Institute for Supply Management releases its August Purchasing Managers Index (PMI) for the factory sector, assessing U.S. manufacturing activity.
Thursday: ISM presents its August PMI for the service sector, and payroll giant ADP publishes its latest private-sector employment snapshot.
Friday: The Department of Labor offers its August employment report.
The fundamentals haven't changed and our macroeconomic indicators still show green lights. At present, the market is trading on noisy news headlines related to China and the tariffs. Volatility in the markets is likely to pick up a little as September is one of the more choppy months, at least historically.
While much of the volatility as of late is self inflicted from the Twitterverse, we do have a President that pays attention to the market. Thus, he tends to try and recover from his gaffes to keep stocks out of too much peril. Right or wrong, it's the world we live in today. We'll try and keep the noise out and our eyes fixed on our long term goals. As always, we are honored and humbled to serve you.