Telemus Weekly Market Review

September 11 – September 15

Stocks rallied to new record highs this week–more than making up for last week’s decline–following Hurricane Irma’s weaker-than-expected Florida landfall and ahead of next week’s FOMC meeting. The Dow led this week’s advance, climbing 2.16%, followed by the S&P 500 up 1.58% and the Nasdaq up 1.39%.

The bulk of this week’s gain came early in the week as investors happily dialed back their estimates on Monday for damages related to Hurricane Irma, which quickly petered out after hitting the Florida Keys on Sunday. Insurers like Travelers led the Monday rally, underpinned by the prospect of fewer-than-expected hurricane related claims, but much of their gains were unwound by the end of the week.

Equities followed up their stellar Monday performance with another win on Tuesday, but conviction was much more modest. Apple held its annual product event, in which the company unveiled a trio of iPhones, including the iPhone 8, the iPhone 8 Plus, and the high-end iPhone X–which CEO Tim Cook called “the biggest leap forward since the original iPhone.”

On the whole, Tuesday’s product event provided little new information as many of the details had been leaked beforehand. Apple sold off immediately following the event, with some investors citing concerns related to the iPhone X’s later-than-expected release date. However, the tech giant bounced back on Friday, extending its massive year-to-date gain to 38.0%.

Following Tuesday’s modest victory–which sent all three major U.S. indices to new record highs–the stock market took a breather, ending the week in a sideways trend. The Nasdaq ticked lower in the latter half of the week, settling just a step below its record high, while the S&P 500 and the Dow ticked up, further extending their record marks.

Investors largely ignored North Korea’s latest missile launch, which flew over northern Japan on Friday morning, continuing the week’s safe-haven sell off. A hotter-than-expected August CPI reading, which showed a year-over-year increase of 1.9%, prompted an adjustment in rate-hike expectations. According to the CME FedWatch Tool, investors currently place the chances of a December rate hike at 57.8%, up from last week’s 31.0%.

However, the Fed’s massive balance sheet will be the focus of next week’s FOMC meeting as it is widely expected that Fed Chair Janet Yellen will announce the start of a gradual reduction of assets bought in response to the 2008 financial crisis. The two-day FOMC meeting will kick off on Tuesday. After hitting a 10-month low last week, the yield on the benchmark 10-yr Treasury note climbed 14 basis points this week, settling at 2.20%, as investors sold bonds to buy stocks.
Crude oil gained almost 5% for the week closing Friday at $49.83 in NYMEX trading.

September 18 – September 22 Economic Calendar

  • Monday
  • Housing Market Index
    10:00 AM ET
  • Treasury International Capital
    4:00 PM ET
  • Import and Export Prices
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • Housing Starts
    8:30 AM ET
  • Current Account
    8:30 AM ET
  • Import and Export Prices
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Existing Home Sales
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • FHFA House Price Index
    9:00 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Leading Indicators
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • John Williams Speaks
    6:00 AM ET
  • Esther George Speaks
    9:30 AM ET
  • PMI Composite Flash
    9:45 AM ET
  • Atlanta Fed Business Inflation Expectations
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Robert Kaplan Speaks
    1:30 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This market commentary is a matter of opinion and is for informational purposes only.  It is not intended as investment advice and does not address or account for individual investor circumstances.  Investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance.  The statements contained herein are based solely upon the opinions of Telemus Capital, LLC.  All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.