Market Perspective for September 10, 2018

U.S. stocks moved higher on Monday with strength in industrials and consumer staples. The transportation subsector powered industrials. The Dow Transportation Index rose 1.82 percent ahead of Hurricane Florence, expected to make U.S. mainland landfall on Thursday morning.

The NOAA upgraded Florence to a category four hurricane on Monday. This storm is slow moving and gaining strength. Building supplies companies rose and Home Depot (HD) rallied more than 2 percent. Insurers slipped. Crude oil fell slightly, and natural gas gained 1 percent on Monday. Wal-Mart (WMT) also gained on the day.

The Jobs Openings and Labor Turnover Survey (JOLTS) for July will be out on Tuesday. There were 6.7 million job openings in June, more than the number of officially unemployed Americans. Wholesale inventories for July, which could affect third-quarter GDP estimates, will also be reported.

August inflation data will be out on Wednesday and Thursday. The Bureau of Labor Statistics’ PPI and CPI are forecast to rise 0.2 and 0.3 percent. Economists expect core CPI will have risen 0.2 percent.

Friday will bring retail sales and industrial production for August and the early consumer sentiment reading for September.

The Atlanta Federal Reserve will update its third-quarter GDP growth forecast tomorrow. It currently predicts 4.4 percent growth. The economist consensus is 3.1 percent.

China’s inflation data came in slightly better than expected on Monday. Chinese fixed-asset investment and industrial production is due later this week. New tariffs on Chinese imports could come as early as this week.

The European Central Bank will meet on Thursday and is expected to keep rates steady.

The U.S. Dollar Index moved lower after the British pound rallied on talk of a Brexit deal. Emerging market currencies were steady, but shares moved lower. Alibaba (BABA), top 10 holding in many emerging market funds, fell more than 3 percent after CEO and Founder Jack Ma announced plans to step down. iShares MSCI Emerging Markets (EEM) declined 0.99 percent. The weaker dollar drove iShares MSCI EAFE (EFA) 0.61 percent higher.

Earnings season has all but wrapped up. Supermarket chain Kroger (KR) will report this week, with earnings expected to fall 1 cent from a year ago to 38 cents per share.

 

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