Key Dates/Data Releases
9/17: Industrial production
9/18: FOMC meeting statement, housing starts
9/19: Existing home sales
|Market Week: September 16, 2019
The Markets (as of market close September 13, 2019)
Stocks continue to rebound from their August declines, posting gains for the third week in a row. Each of the benchmark indexes listed here increased in value, led by the small caps of the Russell 2000, which climbed close to 5.0%. Trade tensions appeared to wane, at least for now, after China said that it wouldn't impose tariffs on imports of certain U.S. agricultural goods. The European Central Bank initiated several stimulus measures, including an interest rate cut. Buoyed by these events, investors moved to stocks. Long-term bond yields soared as prices plummeted. The yield on 10-year Treasuries closed the week up 35 basis points. Year-to-date, the benchmark indexes are all well above their 2018 closing values.
Oil prices fell last week, closing at $54.82 per barrel by late Friday afternoon, down from the prior week's price of
$56.60. The price of gold (COMEX) fell for the third consecutive week, closing at $1,495.70 by late Friday afternoon, down from the prior week's price of $1,514.70. The national
average retail regular gasoline price was $2.550 per gallon on September 9, 2019,
$0.013 lower than the prior week's price and $0.283 less than a year ago.
Close||Prior Week||As of 9/13||Weekly Change||YTD
|Fed. Funds target
Treasuries||2.68%||1.55%||1.90%|| 35 bps||-78 bps
Chart reflects price changes, not total return. Because it
does not include dividends or splits, it should not be used to benchmark
performance of specific investments.
Last Week's Economic News
- Inflationary pressures remain muted as the Consumer Price Index inched up 0.1% in August following a 0.3% bump in July. Over the last 12 months ended in August, the CPI has increased 1.7%. Energy prices fell 1.9%, pulled down by gasoline prices, which dropped 3.5%. The index less food and energy rose 0.3% in August, the same increase as in the previous two months. The index less food and energy rose 2.4%
over the last 12 months, its largest 12-month increase since July 2018. Two of the biggest movers last month were prices for used cars and trucks, which increased 1.1%, and prices for medical care services, which jumped 0.9%.
- Producers of goods and services saw prices creep up 0.1% in August, following a 0.2% increase in July and a 0.1% advance in June. For the 12 months ended in August, producer prices have risen 1.8%. Last month, goods prices actually fell 0.5%, the largest decrease since falling 0.6% in January. Falling energy prices accounted for over 80% of the drop. Prices for services climbed 0.3% last month, due in large part to a broad-based increase in prices for services less trade, transportation, and warehousing, which climbed 0.5%.
- The August federal government budget deficit was $200 billion, up from the July deficit of $120 billion. Year-to-date, the deficit sits at $1,067 billion — $170 billion ahead of the deficit over the same period last year. Comparatively, total receipts ($3.088 billion) are ahead of total receipts last year ($2.985 billion). Total outlays ($4.155 billion) are above last year's outlays ($3.883 billion).
- Consumers upped their purchases of goods and services in August, according to the Census Bureau's report on retail sales. A big increase in auto sales helped drive overall retail sales up 0.4% in August from the previous month, and 4.1% above August 2018. Retail sales excluding motor vehicles and parts showed no gain in August from July. Online retailers' sales increased by 1.6% in August and are up 16% over a year ago.
- A drop in fuel prices (-4.3%) sent import prices down 0.5% in August, according to the latest figures from the Bureau of Labor Statistics. In a sign of global inflationary weakness, import prices declined 2.0% from August 2018. Prices for exports decreased 0.6% last month after increasing 0.2% in July. The August decline was driven by price decreases in both agricultural (foods, feeds, and beverages) and nonagricultural exports (industrial supplies and materials).
- According to the Job Openings and Labor Turnover Summary, there were 7.2 million job openings at the end of July, little changed from June's figures. The number of hires edged up to 6.0 million (5.7 million in June), and separations also increased to 5.8 million (5.5 million in June). The job openings level decreased in wholesale trade (-55,000) and in federal government
(-11,000). The job openings level increased in information (+42,000) and in mining and logging
(+11,000). Over the 12 months ended in July, hires totaled 69.6 million and
separations totaled 67.0 million, yielding a net employment gain of 2.6 million.
- For the week ended September 7, there were 204,000 claims for unemployment insurance, a decrease of 15,000 from the previous week's level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured
unemployment claims remained at 1.2% for the week ended August 31. The advance number of those receiving
unemployment insurance benefits during the week ended August 31 was 1,670,000, a decrease of 4,000 from the prior week's level, which was revised up by 12,000.
Eye on the Week Ahead
All eyes will be on the midweek meeting of the Federal Open Market Committee. Following its last meeting in July, interest rates were lowered 25 basis points. Economic conditions haven't changed much over the summer. President Trump is demanding that the Committee lower rates again. With the stock market rebounding over the last two weeks, it's possible the Committee holds course until it meets again at the end of October.
Data sources: News items are based on reports from
multiple commonly available international news sources (i.e. wire services) and
are independently verified when necessary with secondary sources such as
government agencies, corporate press releases, or trade organizations. Market
data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury
(Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market
Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver);
Oanda/FX Street (currency exchange rates). All information is based on sources
deemed reliable, but no warranty or guarantee is made as to its accuracy or
completeness. Neither the information nor any opinion expressed herein
constitutes a solicitation for the purchase or sale of any securities, and
should not be relied on as financial advice. Past performance is no guarantee
of future results. All investing involves risk, including the potential loss of
principal, and there can be no guarantee that any investing strategy will be
The Dow Jones Industrial Average (DJIA) is a
price-weighted index composed of 30 widely traded blue-chip U.S. common stocks.
The S&P 500 is a market-cap weighted index composed of the common stocks of
500 leading companies in leading industries of the U.S. economy. The NASDAQ
Composite Index is a market-value weighted index of all common stocks listed on
the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index
composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally
weighted index of 150 widely traded blue-chip common stocks worldwide. Market
indices listed are unmanaged and are not available for direct investment.
Jeremy Torgerson is an investment adviser representative with nVest Advisors, LLC, a registered investment adviser that does not provide tax or legal advice. Material presented herein is for informational use only by agents of existing and prospective customers of nVest Advisors, LLC, and is not a specific investment recommendation. nVest Advisors, LLC does not recommend specific investment advice without a signed service agreement with each client. This information is presented for education purposes only, and publication of this material does not represent or imply the recipient or reader has any fiduciary client relationship with the firm. Though information was prepared from sources believed reliable, nVest Advisors, LLC, does not guarantee its accuracy or completeness. nVest Advisors, LLC is an investment adviser firm registered in the states of Texas and Colorado. nVest Advisors, LLC's corporate headquarters is located at 420 Tumbleweed Drive, Brighton, CO 80601. Company mailing address is PO Box 554, Brighton, CO 80601. Past performance is no guarantee of future results.
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