Key Dates/Data Releases
10/16: Retail sales
10/17: Industrial production, housing starts
|Market Week: October 14, 2019
The Markets (as of market close October 11, 2019)
Last week, President Trump said the United States and China had reached a "substantial, phase-one" agreement to resolve the trade war between the economic giants. Essentially, the United States agreed to hold off on the imposition of additional tariffs on Chinese imports, while China agreed to ramp up the purchase of U.S. agricultural products. Buoyed by the prospects of a further trade accord, investors dove into the market, sending each of the indexes listed here higher by the close of trading last week. Both the Dow and Nasdaq rose by almost 1.0%, followed by the Russell 2000 and the S&P 500. However, the biggest mover was the Global Dow, which surged almost 2.0%. With money moving to stocks, gold and 10-year Treasuries saw their respective prices slip.
Oil prices climbed last week, closing at $54.77 per barrel by late Friday afternoon, up from the prior week's price of
$53.01. The price of gold (COMEX) fell last week, closing at $1,491.70 by late Friday afternoon, down from the prior week's price of $1,510.30. The national
average retail regular gasoline price was $2.645 per gallon on October 7, 2019,
$0.003 more than the prior week's price but $0.258 less than a year ago.
Close||Prior Week||As of 10/11||Weekly Change||YTD
|Fed. Funds target
Treasuries||2.68%||1.51%||1.75%|| 24 bps||-93 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 remained subdued in September. The Consumer Price Index was unchanged last month after rising 0.1% in August. Over the last 12 months, the CPI has increased 1.7%. Prices less food and energy rose 0.1% in September
after increasing 0.3% in each of the last 3 months. A closer look at consumer prices last month shows that energy prices fell 1.4% as gasoline prices sank 2.4%. Prices for used cars and trucks dropped 1.6%, apparel prices decreased 0.4%, and medical care commodities prices tumbled 0.6%. Offsetting those declines were increases in prices for food (0.1%), shelter (0.3%), transportation services (0.3%), and medical care services (0.4%).
- Producers of goods and services at the wholesale level saw their prices drop by 0.3% in September following two consecutive monthly increases. Over the past 12 months, producer prices are up 1.4%. A closer look reveals that prices for services at the producer level dropped 0.2% in September after climbing 0.3% in August. Nearly half of the September decline in prices for services can be traced
to machinery and vehicle wholesaling prices, which fell 2.7%. Producer prices for goods decreased 0.4% in September after a
0.5% drop in August. Three-fourths of the September decrease in goods prices can be
traced to prices for gasoline, which fell 7.2%. This report, coupled with the CPI, supports expectations that the Federal Reserve will cut interest rates at least one more time this year.
- Higher fuel prices drove import prices 0.2% higher in September following a 0.2% drop in August. Over the past 12 months, import prices are down 1.6%. Exports fell 0.2% last month after decreasing 0.6% in August. Since September 2018, export prices have also fallen 1.6%.
- According to the Bureau of Labor Statistics Job Openings and Labor Turnover report (JOLTS), the number of job openings slipped by a little more than 100,000 from July. The number of hires also fell by about 200,000, as did the number of separations. In August, job openings rose in such industries as construction; trade; transportation and utilities; finance and insurance; and government. During the same period, job openings fell in education and health services; manufacturing; information; and leisure and hospitality. Over the 12 months ended in August, hires totaled 69.5 million and
separations totaled 67.1 million, yielding a net employment gain of 2.4 million.
- For the week ended October 5, there were 210,000 claims for unemployment insurance, a decrease of 10,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured
unemployment claims inched up from 1.1% to 1.2% for the week ended September 28. The advance number of those receiving
unemployment insurance benefits during the week ended September 28 was 1,684,000, an increase of 29,000 from the prior week's level, which was revised up by 4,000.
Eye on the Week Ahead
A few economic reports worth reviewing are out this week. The retail sales report for September, which measures prices retailers of consumer goods and services receive, is another important indicator of inflationary pressures. August saw retail sales increase by 0.4%. Total sales for the June 2019 through August 2019 period were up 3.7% from the
same period a year ago. Nonstore (online) retailers continue to see sales grow — up 1.6% for the month and 16.0% since August 2018. The report on new residential construction is also out this week. August showed strong growth in building permits and housing starts, which should add to needed inventory for new residential properties for the fall. Another report out this week is the Federal Reserve's statement on industrial production. August saw industrial production rise 0.6% after falling 0.1% in July. Manufacturing also increased 0.5% for the month — both encouraging signs for the manufacturing sector.
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.
This communication is strictly intended for individuals residing in the state(s) of CO and TX. No offers may be made or accepted from any resident outside the specific states referenced.
Prepared by Broadridge Advisor Solutions Copyright 2020.
To opt-out of future emails, please click here.