Market Perspective for September 30, 2019

The Nasdaq rallied 0.75 percent on Monday, the S&P 500 Index 0.50 percent, the Dow Jones Industrial Average 0.36 percent and the Russell 2000 Index 0.19 percent.

Technology drove the rally with SPDR Technology (XLK) gaining 1.05 percent on the day. SPDR Healthcare (XLV) advanced 0.90 percent, SPDR Consumer Discretionary (XLY) 0.86 percent and SPDR Materials (XLB) 0.85 percent. iShares Expanded Tech Software (IGV) climbed 1.00 percent.

iShares MSCI Edge Minimum Volatility USA (USMV) increased 0.47 percent on Monday, Vanguard Dividend Appreciation (VIG) 0.57 percent.

Manufacturing PMIs will be released tomorrow. Last week the flash PMIs showed a strengthening U.S. economy, but weakness in Europe. China’s PMI was stronger than expected at 51.4, an increase from August. Readings above 50 signal expansion.

Motor vehicle sales will be released later this week. Last month’s annualized sales pace was 17 million and analysts expect September’s pace will be similar.

This week ends with the September employment report. Economists forecast 146,000 new hires, up from August’s 130,000, unemployment of 3.7 percent and wage growth of 0.3 percent. In addition to various economic reports, multiple Federal Reserve officials will deliver scheduled public remarks.

Crude oil weakened and fell below $55 per barrel. SPDR Energy (XLE) slid 0.72 percent on the day.

Bond yields were steady on Monday. The 10-year Treasury yield was unchanged from Friday at 1.68 percent. Bond funds were up across the board. iShares iBoxx Investment Grade Corporate Bond (LQD) returned 0.33 percent, iShares iBoxx High Yield Corporate Bond (HYG) 0.11 percent, Invesco Senior Loan (BKLN) 0.09 percent and iShares 20+ Year Treasury Bond (TLT) 0.25 percent.

The U.S. Dollar Index rallied 0.30 percent on Monday, its highest level in more than two years.

McCormick (MKC), Lennar (LEN), Paychex (PAYX), RPM International (RPM), Acuity Brands (AYI), Costco (COST), Pepsi (PEP) and Constellation Brands (STZ) headline a light week for earnings reports.


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