Investment Commentary –August 22nd, 2017

Market Indices as of Market Close August 22nd, 2017
Dow 21,899 (10.81% YTD)
S&P 2,452 (9.60% YTD)
NASDAQ 6,297 (16,99% YTD)
Gold $1,290 (10.70%)
OIL $47.65 (-16.39%)
US 10Y Treasury 2.215 (-23.05%)
Barclay Bond Aggregate (3.29% YTD)

Wall Street rises on hopes for tax reform

NEW YORK (Reuters) – U.S. stocks ended up on Tuesday, with each of the three major indexes posting their best one-day percentage gains in over a week, as lawmakers’ comments on tax reform and the debt ceiling boosted investor optimism.

The Dow Jones Industrial Average .DJI rose 196.21 points, or 0.9 percent, to 21,899.96, the S&P 500 .SPX gained 24.11 points, or 0.99 percent, to 2,452.48 and the Nasdaq Composite .IXIC added 84.35 points, or 1.36 percent, to 6,297.48.

Around the Web:

Housing starts sputter

Total housing starts in the U.S. declined by 4.8% in July, the fourth decrease in the last five months. The drop for multifamily housing of five or more units was far more drastic, plunging 17.1%.

Treasury yields fall

As the stock market continues its bumpy ride and the Fed appears to be holding off on further interest-rate increases, investors are pouring assets into bonds, pushing the yield of the 10-year U.S. Treasury note down under 2.2%.

Gold flirts with $1,300

A weakening dollar, the Fed’s reluctance to raise rates, and the stock market’s recent fall all combined to send gold flirting with $1,300 an ounce.

Fed split over next hike

Minutes from the July 25–26 meeting reveal the Fed is worried about soft inflation numbers, but officials also agreed to begin the shrinking of the central bank’s holdings soon, perhaps in September.

On Tap for the rest of the week:
Wednesday: New home sales, U.S. Census Bureau
Thursday: Existing home sales, Federal Reserve Bank of St. Louis


Leaders this past week included utilities and services. Laggards included consumer goods and conglomerates.

THIS DAY IN FINANCAL HISTORY: Market Reacts to Iraqi Invasion

On this day in 1989, amidst fears of an Iraqi invasion of Kuwait, the Dow Jones takes a plunge, losing 76.73 points. This was a major blow to the market, which was on the verge of breaking the 3,000-point mark for the first time.

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.