Market Perspective for August 12, 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.

 

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