Market Week: September 11, 2017

The Markets (as of market close September 8, 2017)

Retail gas prices surged as Hurricane Harvey forced refineries to shut down, leading to curtailed petroleum shipments. Higher gas prices cut into investors’ pockets, prompting them to move money from stocks to bonds. Each of the indexes listed here lost value last week, with the exception of the Global Dow, which posted a modest gain. Hurricanes Harvey and Irma, plus continued tensions between the United States and North Korea, didn’t help equities. The yield on 10-year Treasuries fell 11 basis points as prices rose.

The price of crude oil (WTI) closed at $47.56 per barrel, up slightly from the prior week’s closing price of $47.35 per barrel. The price of gold (COMEX) reached $1,351.00 by early Friday evening, $21.10 higher than the prior week’s price of $1,329.90. The national average retail regular gasoline price increased to $2.679 per gallon on September 4, 2017, $0.280 higher than the prior week’s price and $0.456 more than a year ago.

Market/Index 2016 Close Prior Week As of 9/8 Weekly Change YTD Change
DJIA 19762.60 21987.56 21797.79 -0.86% 10.30%
Nasdaq 5383.12 6435.33 6360.19 -1.17% 18.15%
S&P 500 2238.83 2476.55 2461.43 -0.61% 9.94%
Russell 2000 1357.13 1413.57 1399.43 -1.00% 3.12%
Global Dow 2528.21 2852.47 2853.39 0.03% 12.86%
Fed. Funds target rate 0.50%-0.75% 1.00%-1.25% 1.00%-1.25% 0 bps 50 bps
10-year Treasuries 2.44% 2.16% 2.05% -11 bps -39 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 Headlines

·         The Bureau of Economic Analysis releases a monthly report on the trade deficit for goods, as well as a more comprehensive report on the deficit for both goods and services. For July, the goods and services deficit was $43.7 billion, up $0.1 billion from June. July exports were $194.4 billion, $0.6 billion less than June exports. July imports were $238.1 billion, $0.4 billion less than June imports. Year-to-date, the goods and services deficit increased $27.9 billion, or 9.6%, from the same period in 2016. Examining the trade balance provides an indication of a country’s relative standing in the world economy, and affords a comparison of the prices of domestically produced goods and services to those produced in other countries.

·         A survey of the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business® shows economic activity in the non-manufacturing sector expanded in August over July. Business activity, new orders, employment, and prices all increased in August, according to the survey.

·         In the week ended September 2, the advance figure for initial claims for unemployment insurance was 298,000, an increase of 62,000 from the previous week’s revised level. This is the highest level for initial claims since April 18, 2015, when it was also 298,000. The advance insured unemployment rate remained at 1.4%. The advance number of those receiving unemployment insurance during the week ended August 26 was 1,940,000, a decrease of 5,000 from the previous week’s revised level.

Eye on the Week Ahead

Hurricane season is certainly upon us, and the financial effects of both hurricanes Harvey and Irma have been widespread. Inflation has been running cold and is not likely to pick up significantly. The latest inflationary gauges for consumer prices are out next week with reports on the Consumer Price Index, the Producer Price Index, and retail sales for August available.

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/ Market Data (oil spot price, WTI Cushing, OK); (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 successful.

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 un-managed and are not available for direct investment.


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