Investment Commentary –August 8th, 2017

Market Indices as of Market Close August 8th, 2017
Dow 22,085 (11.75% YTD)
S&P 2,474 (10.46% YTD)
NASDAQ 6,370 (18.34% YTD)
Global Dow 2,875 (13.72%)
Gold $1,265 (8.62%)
OIL $49.12 (-13.88%)
US 10Y Treasury 2.268 (-22.35%)
Barclay Bond Aggregate (2.94% YTD)

U.S. stocks end lower; Dow snaps 10-day streak of gains

U.S. stocks closed lower on Tuesday, with material and health care stocks leading the retreat from record levels. The Dow Jones Industrial Average DJIA, -0.15% fell 0.2% to 22,086. The blue-chip average had previously risen for 10 straight sessions, including nine days in a row where it ended at a record close. The S&P 500 SPX, -0.24% lost 0.2% to 2,474; the benchmark index also ended at a record on Monday. The Nasdaq Composite Index COMP, -0.21% slid 0.2% to 6,370. The day’s losses were widespread, with 10 of the 11 primary S&P 500 sectors down on the day. Material stocks XLB, -0.82% fell 0.9% while health care names XLV, +0.04% slid 0.5%. The only industry to rise was utilities XLU, +0.39% up 0.3%. Adding to the uncertain environment, the Washington Post reported that North Korea had successfully produced a miniaturized nuclear warhead; President Donald Trump said he would respond with “fire and fury like the world has never seen” if the Asian country doesn’t halt threats.

U.S. job openings at record high; labor market tightening

WASHINGTON (Reuters) – U.S. job openings jumped to a record high in June, outpacing hiring, the latest indication that companies are having trouble finding qualified workers.
The monthly Job Openings and Labor Turnover Survey, or JOLTS, released by the Labor Department on Tuesday also underscored labor market strength that will likely encourage the Federal Reserve to continue tightening monetary policy despite benign inflation and concerns about consumer spending.

“Companies are running out of workers to hire to do the job or even train to do the work, and this is a ticking time bomb for economic growth,” said Chris Rupkey, chief economist at MUFG in New York. “Today’s JOLTS data bring a September meeting balance sheet unwind announcement a little closer to reality.”

Around the Web: Oil on the brink

After rallying the previous week, crude oil prices briefly topped $50 a barrel for the first time since late May. However, oil slipped below that threshold on Tuesday and finished the week around $49.50 a barrel.

Stuck in reverse

The positive sales momentum that automakers have enjoyed in recent years continues to fade in the rearview mirror. A private report on Tuesday showed that U.S. auto sales fell in July by 7%, extending a recent run of negative monthly results.

Surging euro
The euro rose on Wednesday to its highest level versus the U.S. dollar since January 2015. Europe’s common currency has been lifted by recent economic gains and expectations that the European Central Bank will soon tighten its monetary policy.


On Tap for the rest of the week:

Thursday: Federal budget report, U.S. Department of the Treasury
Friday: Consumer Price Index, U.S. Bureau of Labor Statistics


Leaders this past week included Conglomerates and consumer goods. Laggards included Financials, Technology and Healthcare.

THIS DAY IN FINANCAL HISTORY: Market Reacts To Announcement

On this day in 1974, with the announcement of President Nixon’s resignation, the stock market took a hit. The market lost 12.67 (1.48%) points with the speculation that Nixon’s successor, Gerald Ford, would not be able to turn around the country’s recent economic downturn.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.