Market Perspective for September 13, 2019

The Russell 2000 Index rallied 4.85 percent this week, while the Dow Jones Industrial Average managed a 1.56 percent advance. The S&P 500 Index and Nasdaq increased 0.92 percent and 0.86 percent, respectively. The S&P 500 Index and DJIA both are close to all-time highs.

SPDR Financials rallied 3.86 percent as rising yields boosted the banking sector. SPDR S&P Regional Banking (KRE) climbed 8.12 percent.

SPDR Energy (XLE) and SPDR Materials (XLB) rose 3.43 percent and 3.32 percent. VanEck Steel (SLX) jumped 9.43 percent, SPDR S&P Oil & Gas Services (XES) 7.70 percent, SPDR S&P Oil & Gas Exploration & Production (XOP) 5.68 percent and VanEck Coal (KOL) 3.83 percent.

Economic data was strong. Job openings remained at 7.2 million, still more than the number of unemployed Americans. Initial jobless claims fell to 204,000.

Retail sales grew 0.4 percent in August, faster than economists predicted. The University of Michigan’s advance consumer sentiment reading for September increased to 92, beating expectations. Business inventories grew 0.4 percent in July, a positive sign for third quarter GDP. The Atlanta Federal Reserve’s GDP Now model increased its third quarter GDP forecast to 1.8 percent this week.

Emerging markets rallied. iShares MSCI Emerging Markets returned 2.41 percent for the week, while iShares MSCI EAFE (EFA) gained 2.12 percent iShares Barclays 20+ Year Treasury (TLT) slid 6.32 percent for the week.

Crude oil fell to $54.85 after OPEC voted against further production cuts. Many energy stocks rallied strongly this week as energy shorts were squeezed. SPDR S&P Oil Services (XES) and Explorers (XOP) cut their losses but are still down 8.81 percent and 11.20 percent this year.

Kroger (KR) and Broadcom (AVGO) both beat earnings estimates, while Oracle (ORCL) matched forecasts.

 

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