Month: August 2019

The S&P 500 Index declined 1.23 percent on the day, while the Dow Jones Industrial Average lost 1.48 percent.  The NASDAQ fell 1.20 percent. SPDR Real Estate (XLRE) slipped 0.13 percent, SPDR Utilities (XLU) 0.20 percent, SPDR Consumer Staples (XLP) 0.67 percent and SPDR Healthcare (XLV) 0.96 parent.

iShares Edge MSCI Minimum Volatility USA (USMV) slid only 0.81 percent. Vanguard Dividend Appreciation (VIG) decreased 1.15 percent.

The National Federation of Independent Business will release its small business confidence index on Tuesday. It registered a reading of 103.3 in July, near its 4-decade high. Consumer price inflation for July is out tomorrow. Economists forecast 0.3 percent headline inflation and 0.2 percent core inflation for the month. July retail sales are due on Thursday.

August manufacturing PMIs from the New York and Philadelphia Federal Reserve will also be released this week. Both showed a strong uptick in manufacturing activity in July.

The National Association of Homebuilders will release its August confidence index. Last month it was at 65. Housing starts and building permits for July are due as well. The University of Michigan will release its advance consumer sentiment reading for August.

Overseas, Germany will release its second quarter GDP report. The consensus calls for no growth. Chinese industrial production and fixed asset investment is due midweek as well.

The U.S. Dollar Index slipped 0.1 percent on Monday as major currencies held steady. The Argentine peso plummeted 17 percent after the first round of the presidential election showed voters may favor former President Kirchner. She outlawed the publishing of private economic data to hide the sky-high inflation rates under her leadership.

Fears that China might send the PLA into Hong Kong to quash ongoing protests sent iShares MSCI Emerging Markets (EEM) down 1.25 percent on Monday. Protestors shut down Hong Kong’s airport on Monday.

Crude oil rose near $55 per barrel on Monday, though SPDR Energy (XLE) still slid 1.18 percent.

Retail earnings reports pick up this week with Wal-Mart (WMT) and Alibaba (BABA) headlining. JD.com (JD), Advance Auto Parts (AAP) and Macy’s (M) are other major retailers delivering results this week. Beyond retail, Myriad Genetics (MYGN), Cisco (CSCO), Canopy Growth (CGC), Nvidia (NVDA), Applied Materials (AMAT), Deere (DE) and Nordic American Tankers (NAT) also report.

The S&P 500 Index slipped 0.47 percent on the week.  Still, several our preferred funds provided solid returns.  SPDR Healthcare (XLV), SPDR Consumer Discretionary (XLY) and SPDR Consumer Staples (XLP) increased 0.42 percent, 0.14 percent and 0.12 percent, respectively.

Utilities and real estate also rewarded investors. SPDR Real Estate (XLRE) advanced 1.80 percent and SPDR Utilities (XLU) 1.15 percent. Most of the gains came courtesy of lower bond yields. iShares 20+ Year Treasury (TLT) advanced 2.64 percent.

Low volatility and high-quality dividend funds outperformed for yet another week. iShares Edge MSCI Minimum Volatility USA (USMV) advanced 1.07 percent this week. Vanguard Dividend Appreciation (VIG) climbed 0.55 percent. Since May 1 of this year, USMV has risen 5.85 percent and VIG 3.27 percent, while SPDR S&P 500 (SPY) has slipped 0.34 percent.

This week’s dip in stocks was mainly due to the People’s Bank of China allowing the yuan to slide past the 7.00 level. The Chinese yuan fell 1.60 percent for the week. The last time China made a significant currency move was in August 2015, when its economy was slowing. Escalating protests in Hong Kong heightened the market’s awareness of China risks. iShares China Large Cap (FXI) fell 2.79 percent on the week, iShares MSCI Hong Kong (EWH) 3.53 percent and iShares MSCI Emerging Markets (EEM) 1.68 percent.

Economic data was light this week. The services PMIs showed the economy is still in a healthy expansion. The Job Openings and Labor Turnover Survey (JOLTS) showed 7.3 million openings, more than the number of unemployed Americans. Weekly jobless claims fell to 209,000, below estimates. Producer price inflation was 0.2 percent in July, higher than the 0.1 percent forecast.

Crude oil slumped at much as 8.5 percent this week before closing with a loss of 1.6 percent. Crude oil closed at $52.54 per barrel, down from a high of $56 at the start of the week. Natural gas rebounded after making a new three-year low near $2 per mmBTU.

Earnings season remains positive for stocks. Shares of Roku (ROKU) have gained nearly 250 percent on the year following strong earnings. CVS Health (CVS), Booking Holdings (BKNG) and Novo Nordisk (NVO) advanced 6.45 percent, 3.91 percent and 3.18 percent thanks in part to their earnings reports. Disney (DIS) missed estimates and shares dipped 2.25 percent for the week.