Telemus Weekly Market Review

September 4 – September 8, 2017

The major U.S. indices all moved lower this week as geopolitical tensions with North Korea, declining confidence in the feasibility of tax reform, and Hurricane Irma–which is expected to hit Florida this weekend–weighed on investor sentiment. The Nasdaq led the retreat, dropping 1.17%, while the Dow and the S&P 500 finished with respective losses of 0.86% and 0.61%.

Even though the equity market settled lower for the week, it remains within striking distance of its all-time high; the S&P 500 finished Friday’s session just 0.8% below its record-high close of 2,480.91. Treasuries rallied this week, sending yields to new lows for the year. The benchmark 10-yr yield dropped 11 basis points to 2.06%, hitting its lowest level since early November.

Similarly, other safe-haven assets–like gold and the Japanese yen–moved higher, jumping 1.6% and 2.3%, respectively. The yellow metal settled at a 13-month high of $1,351.10 a troy ounce while the dollar/yen pair finished at a ten-month low. In addition, the CBOE Volatility Index (VIX) spiked 20.2% to 12.18. The financial sector was pressured by the decline in Treasury yields, but most of the remaining groups finished with losses of no more than 1.1%.

Relative strength in heavyweight names like Home Depot, Exxon Mobil, and Pfizer prevented the stock market from a significant decline, but there were some soft spots in small-cap and high-beta pockets of the market. The small-cap Russell 2000–which is seen as a leading indicator given that small-cap companies largely rely on domestic consumers–underperformed, dropping 1.0%. After pacing the stock market’s post-election rally, the small-cap index now holds a year-to-date gain of just 3.1%, far below the S&P 500’s year-to-date advance of 9.9%.

High-beta chipmakers also struggled, sending the PHLX Semiconductor Index lower by 2.3%. Large-cap names like Qualcomm and NVIDIA showed particular weakness, settling with losses of 4.6% and 4.0%, respectively. Still, for the year, the PHLX Semiconductor Index is higher by 20.6%.

Following this week’s events, the fed funds futures market places the chances of a December rate hike at 31.9%, down from last week’s 43.7%. The 10 year U.S. Treasury closed Friday at 2.05% as investors sought a safe haven.

Crude oil closed Friday at $47.86 just slightly higher than last week’s close.

September 11 – September 15 Economic Calendar

  • Monday
  • NFIB Small Business Optimism Index
    6:00 AM ET

  • Redbook
    8:55 AM ET
  • JOLTS
    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
  • Tuesday
  • NFIB Small Business Optimism Index
    6:00 AM ET

  • Redbook
    8:55 AM ET
  • JOLTS
    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
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • PPI-FD
    8:30 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Consumer Price Index
    8:30 AM ET

  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Retail Sales
    8:30 AM ET

  • Empire State Mfg Survey
    8:30 AM ET
  • Industrial Production
    9:15 AM ET
  • Business Inventories
    10:00 AM ET
  • Consumer Sentiment
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 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.