Month: September 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.

The Dow Jones Industrial Average slipped 0.38 percent this week, the S&P 500 Index 0.96 percent, the Nasdaq 2.13 percent and the Russell 2000 Index 2.49 percent.

SPDR Utilities (XLU) increased 1.35 percent and SPDR Consumer Staples (XLP) gained 1.28 percent. SPDR Real Estate (XLRE) saw a smaller advance of 0.38 percent.

Economic data showed the U.S. economy strengthening. The flash manufacturing and services PMI for September came in above August readings and economist estimates.

The Case-Schiller home price index showed home prices increased 3.2 percent year-over-year in July. New home sales crushed forecasts and hit an annualized pace of 713,000. Housing is one of the best indicators of core economic strength.

Initial claims for unemployment were 213,000, consistent with readings over the past several weeks. Durable goods orders increased 0.2 percent, well ahead of a consensus forecast of negative 0.7 percent. The University of Michigan’s consumer sentiment survey ticked up to 93.2, beating expectations.

iShares MSCI EAFE (EFA) slipped 0.85 percent on the week. iShares MSCI Emerging Markets (EEM) declined 2.24 percent, with most of the loss coming on Friday.

Micron Technology (MU) beat earnings estimates by 14 percent, but weaker guidance sent shares lower. Nike (NKE) also beat earnings forecasts and its shares increased 6.5 percent on the week. Rite Aid (RAD) and KB Home (KBH) also beat earnings this week.

Market Perspective for September 23, 2019

The Dow Jones Industrial Average gained 0.06 percent on a flat day of trading on Monday. The S&P 500 Index dipped 0.01 percent, the Nasdaq 0.06 percent and the Russell 2000 Index 0.10 percent.

Consumer stocks led the market on Monday. SPDR Consumer Staples (XLP) advanced 0.40 percent and SPDR Consumer Discretionary (XLY) climbed 0.35 percent.

The flash Markit manufacturing PMI for September climbed to 51, better than the consensus forecast of 50.3. This reading continues a string of surprisingly strong U.S. economic data reports over the past several weeks.

Europe was not as lucky. The flash Eurozone PMI fell to a 7-year low of 45.6 and the core German economy’s PMI slid to 41.4. Readings below 50 signal contraction. The final PMIs will be released next week.

The Conference Board and University of Michigan will release their September consumer confidence surveys this week. Analysts expect the Conference Board reading to fall a point to 134.1. The University of Michigan survey is anticipated to rise to 92.

New home sales are out midweek. Economists forecast August sales to have risen to an annualized pace of 660,000. Housing data has delivered a string of surprisingly strong data points. This week will also see a homebuilder deliver earnings and pending home sales on Thursday.

Crude oil was volatile on Monday after conflicting reports concerning the repair timeline in Saudi Arabia. Report out early on Monday said it could take months to fix damage from recent attacks, far longer than the previous estimate of several weeks. West Texas Intermediate crude closed up 55 cents to $58.64 per barrel.

The 10-year Treasury yield fell to 1.71 percent. Invesco Senior Loan (BKLN) gained 0.10 percent on the day and Fidelity Corporate Bond (FCOR) 0.20 percent. iShares iBoxx High Yield Corporate Bond (HYG) slipped 0.05 percent.

Nike (NKE), Autozone (AZO), Cintas (CTAS), CarMax (KMX), KB Home (KBH), Worthington Industries (WOR), Micron Technology (MU) and Carnival (CCL) report earnings this week.