Category: Weekly Updates

Weekly Updates

Financial News and Portfolio Management Discussion through August 17th

Stocks were highly volatile but recovered some ground to close out the week.  Fears of a potential recession drove stocks down after the 2-year Treasury briefly offered a higher yield than the 10-year Treasury.  The S&P 500 dropped 1.0% and the Dow fell 1.5% for the week.  Abroad, Japan eased 1.3% and Europe declined by 0.5% for the week.  The 10-year Treasury yield continued to decline ending the week at 1.54%.

Trump announced he would delay and remove some tariffs set to hit Chinese goods on September 1st.  The $156 billion in goods would now have a 10% tariff applied beginning December 15th.

The CPI rose 0.3% in July from June and core prices rose 0.3% as well.  Core prices posted the largest two month gain in more than a decade.

Industrial production in China grew less than expected in July.

Germany’s economy contracted by 0.1% in the second quarter due to a decline in exports.

An ECB official said that the ECB will announce stimulus measures next month that will surpass investor expectations.

July retail sales posted strong growth, up 0.7%, well-outpacing expectations and showing consumers are still supporting the US economy.

Financial News and Portfolio Management Discussion through August 10th

Stocks posted a down week with trade tensions weighing on performance. The S&P 500 was down 0.5% and the Dow declined 0.7% for the week.  Abroad, Japan dropped 1.9% and Europe fell 1.7% for the week.  The 10-year Treasury yield, after hitting its lowest level in several years, ended the week at 1.73% down from 1.86% the previous week.  During the week gold climbed above $1,500 a troy ounce for the first time in six years but finished the week at $1,497.

The Treasury labeled China a currency manipulator after China let its currency depreciate.  China let the yuan fall below the 7 yuan to dollar level for the first time since 2008. China also suspended purchases of US agricultural products in an escalation of trade tensions.

Central banks in India, New Zealand and Thailand cut their benchmark interest rates more than expected.

German industrial production in June was much lower than expected.

Japan posted a 2Q GDP of 1.8%, far above expectations.

China set the onshore level of the yuan at a less aggrieve level then economists were expecting. A move to not escalate tensions.

France posted a surprise acceleration in growth based on a business survey.

The UK’s GDP contracted 0.2% in the second quarter.

Financial News and Portfolio Management Discussion through August 3rd

Stocks had their worst week since December driven by renewed trade fears as the US proposed new tariffs on China.  The S&P 500 fell 3.1% and the Dow dropped 2.6% for the week.  Abroad, Japan declined 2.6% and Europe slumped 3.2% for the week.  The 10- year Treasury yield ended the week at 1.86%, its lowest level since the 2016 presidential election.

President Trump announced a new 10% tariff on the roughly $300 billion worth of Chinese imports that had yet to be taxed.  The tariffs go into effect on September 1st.  The tariffs were announced after negotiations this week between the US and China yielded little progress.  The news rattled markets.

The Fed made the expected move of cutting its benchmark Fed Funds rate a quarter percent to target 2.0% to 2.25%.  The move was designed to help cushion the US economy from growing global economic weakness.  It was the first interest rate cut since 2008.  Investors were disappointed in comments made by Fed Chairman Powell after the meeting as he didn’t allude to any further rate cuts.  The Fed also announced it would end the runoff of its $3.8 trillion bond portfolio two months earlier than expected, a supportive move for the economy.

The July jobs report came in right in line with expectations with 164,000 new hires and the unemployment rate remaining at 3.7%.  The average hourly wage rose to 3.2% from 3.1% in June.  June and may hiring was revised down by 41,000.

The Conference Board’s consumer confidence reading hit its highest level this year in July.

The Fed’s preferred inflation gauge the Personal Consumption Expenditures Price index rose 0.1% in June for a trailing year gain of 1.6%.

The eurozone economy grew at a 0.8% rate in the second quarter, a steep slow down from 1.8% growth in the first quarter.  Manufacturing confidence fell to its lowest level in six years.

The Justice Dept. approved the merger between T-Mobile and Sprint after they agreed to sell assets to satellite TV provider Dish Network. The move combined the nation’s number 3 and 4 wireless carriers.

Of the 225 S&P 500 firms that have reported earnings to date, 179 have posted better than expected results.  Analysts now expect a 2.5% contraction in earnings for the quarter, better than the expected 3.0%.

A hacker took 106 million credit card customers and applicants’ personal information in one of the largest ever data breaches of a bank.

Financial News and Portfolio Management Discussion through July 27th

US stocks ended the week hitting new record highs driven by strong corporate earnings.  The S&P 500 jumped 1.7% and the Dow edged up 0.1% for the week.  Internationally, both Japan and Europe rose 0.9% for the week.  The yield on the 10-year Treasury edged up over the week to finish at 2.08%.

Congress and the White House reached an agreement to raise federal spending and the government’s borrowing limit through July 2021.

The Justice Dept is opening an antitrust review into whether large tech companies are unfairly holding back competition.

US home sales fell 1.7% in June from May and are down 2.2% from a year earlier – the 16th straight month of annual declines.

The ruling conservative party voted strong Brexit supporter Boris Johnson to become the next Prime Minister of the UK setting up the possibility of a no deal Brexit.

The ECB said it will be cutting short term interest rates for the first time since 2016 and restart its bond-buying program.  It said it expected to keep its key interest rate at -0.4% or lower through the first half of 2020.  The changes are expected to be announced at their next policy meeting in September.

The first reading of second-quarter GDP showed the US grew at a better than expected 2.1%.  While slowing from earlier int eh year the pace was still at a solid clip driven by consumer spending.

Facebook posted strong second-quarter earnings despite a $5M fine by the FTC.

138 S&P companies have reported earnings to date and 77% have topped analysts’ estimates.

Nissan announced it is cutting 9% of its workforce after struggling with its operations.

Amazon’s streak of record profits ended in the second quarter with a 3.6% gain, missing expectations.

The Justice Dept. approved the merger between T-Mobile and Sprint after they agreed to sell assets to satellite TV provider Dish Network. The move combined the nation’s number 3 and 4 wireless carriers.

Financial News and Portfolio Management Discussion through July 20th

US stocks fell over the week on expectations of just a quarter percent rate cut by the fed and mixed corporate earnings.  The S&P 500 fell 1.2% and the Dow declined 0.7% for the week.  Abroad, Europe eked out a 0.1% gain and Japan dropped 1.0% for the week.  Oil rose 4.5% over the week to end at $60.21 a barrel.  The yield on the 10-year Treasury eased to finish the week at 2.05%.

China posted its slowest pace of growth since 1992 with a second-quarter GDP of 6.2%.  Economists had expected 6.3% and last quarter the country grew at a 6.4% rate.

US retail spending rose 0.4% in June for the fourth straight month of rising spending showing the US consumer remains a strength for the economy.

US and China trade negotiations have stumbled over how to handle restrictions the US has placed on telecommunications giant Huawei.

Fed officials made their clearest signals yet that a quarter percent rate cut is on tap at their July meeting.

Netflix posted its first decline in US users in close to a decade.

With 15% of S&P 500 firms reporting earnings to date, earnings are on pace to decline 2.1% in the second quarter compared to a year earlier.  This is an improvement on the expected 3% contraction.