Market Perspective for August 26, 2019

The Nasdaq advanced 1.32 percent on Monday, the Russell 2000 Index 1.13 percent, the S&P 500 Index 1.10 percent and the Dow Jones Industrial Average 1.05 percent.

Technology and communication services led the market. SPDR Communication Services (XLC) advanced 1.50 percent and SPDR Technology (XLK) 1.39 percent. SPDR Consumer Staples (XLP) climbed 1.24 percent.

iShares Edge MSCI Minimum Volatility USA (USMV) returned 1.01 percent on Monday. The fund continues to outperform during market weakness, but more closely tracks the market to the upside. Vanguard Dividend Appreciation (VIG) was even stronger. It rose 1.06 percent.

Durable goods orders rose 2.1 percent in July, beating expectations.

The Case-Shiller home price index for June is out on Tuesday along with the Conference Board’s consumer confidence index. Analysts predict it declined from 135.7 in July to 128. However, analysts see the University of Michigan consumer sentiment survey rising to 92.3. The latter will be released on Friday.

The second estimate of second quarter GDP is out on Thursday. Economists predict the government will revise growth from 2.1 percent to 2.0 percent.

The 10-year Treasury yield rallied along with stocks on Monday. It closed at 1.54 percent. Bonds were broadly higher. iShares iBoxx High Yield Corporate Bond (HYG) closed very close to a new 52-week high.

The U.S. Dollar Index advanced 0.43 percent. Dollar strength boosted the relative return of SPDR S&P 500 (SPY) versus the international competition. SPY climbed 1.11 percent on Monday, iShares MSCI EAFE (EFA) 0.82 percent and iShares MSCI Emerging Markets (EEM) 0.56 percent. Emerging market currencies fell after the Chinese yuan weakened 0.53 percent.

Autodesk (ADSK), J.M. Smucker (SJM), Hewlett Packard Enterprise (HPE), Bank of Nova Scotia (BNS), Bank of Montreal (BMO), Tiffany (TIF), Five Below (FIVE), Altaba (AABA) Okta (OKTA), Williams-Sonoma (WSM), Workday (WDAY), Ulta Beauty (ULTA), Best Buy (BBY), Dollar Tree (DLTR), Dollar General (DG), Big Lots (BIG) and Campbell Soup (CPB) headline  companies reporting earnings this week.

 

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