Investment Commentary –September 7th, 2016

Market Indices as of Market Close September 7th, 2016
Dow 18,526 (6.32% YTD)
S&P 2,186 (6.96% YTD)
NASDAQ 5,283 (5.52% YTD)
Global DOW 2,489 (2,033 week low/high 2,493)
10-year Treasury 1.54 (1.32 52 week low /2.38 high)
Gold 1,349 ($1,053 52 week low /high $1,384)
Oil $46.14 ($33.28 52 week low /high $54.34)

S&P, Dow fall; NASDAQ posts record close after Fed report, Apple event

The S&P 500 and the Dow lost a little ground Wednesday, after a report from the 12 Federal Reserve districts had a modestly positive tone about the economy but noted that the presidential election is making some firms cautious about expanding activity.

But the Nasdaq Composite eked out a gain and closed at a record high as tech stocks rallied, helped in part by Apple Inc. AAPL, -0.01% which rose 0.6% after unveiling the iPhone 7 at its flagship product event in San Francisco.

The Fed’s latest beige book report, meanwhile, was viewed as providing more fodder for the central bank, as it contemplates an interest-rate increase in the near term.

Stocks pared some of losses after the release, with the S&P 500 SPX, -0.01% ending down less than a point at 2,186.15, buoyed by gains in energy shares, which were boosted by a rise oil prices CLV6, +1.23% LCOX6, +2.73% followed by tech stocks. The S&P 500 has now gone 50 consecutive sessions without a daily drop of more than 1%.

A 0.9% drop in consumer-staples stock weighed on the large-cap gauge, led by a 13.7% drop in Sprouts Farmers Market Inc. SFM, -13.72% which tumbled after it cut its quarterly and 2016 guidance. The sharp dropped pulled other grocery retailers lower, most notably Whole Foods Market Inc. WFM, +0.58% and Kroger Co. KR, +0.42%

The Dow Jones Industrial Average DJIA, -0.06% lost 12 points, or 0.1%, to finish at 18,526, pressured by a 1.3% drop in Wal-Mart Stores Inc. WMT, +0.27% and a 1% loss in Home Depot Inc. HD, -0.41% partly offset by a 2% gain by Caterpillar Inc. CAT, +2.00%

And the tech-heavy Nasdaq Composite Index COMP, +0.15% rose 8 points, or 0.2%, to a record close of 5,283.93, helped by Apple’s event.

Among individual stocks, American depositary receipts for Japan’s Nintendo NTDOY, +28.79% surged more than 26% in strong volume after Apple said it would add the company’s popular Super Mario Run game to its app store and put Pokémon Go on the Apple Watch.

Job openings soar to all-time high of 5.9 million in July

Job openings jumped and more people were hired in July, the Labor Department said Wednesday.

The Labor Department’s job openings and labor turnover survey showed 5.87 million openings, an all-time high, while hires increased to 5.23 million from 5.17 million in June.

The number of people quitting jobs voluntarily was flat at 2.98 million, but that’s still up substantially from the depths of the recession, signaling more worker confidence in the ability to find another job.

JOLTS lags the monthly nonfarm payrolls data, but provides more detail on the labor market and how fluid, or stagnant, it is.

“The continued upward trend is welcome, and consistent with the NFIB jobs-hard-to-fill measure hitting a new cycle high in August,” wrote Pantheon Macro Chief Economist Ian Shepherdson in a note Wednesday.

“That’s the single best survey-based measure of future wage pressures, and it screams upside risk for the foreseeable future. Finally, note that the quits rate, one of Dr. Yellen’s favorite indicators, was unchanged – after a one-tenth upward revision to June – at 2.1%, consistent with the unemployment rate just below 5%.”


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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.