Telemus Weekly Market Review

August 27 – August 31, 2018

After closing in record territory the previous Friday, the S&P 500 marched even higher last week, adding 0.93% in total. The tech-heavy Nasdaq outperformed, adding 2.06% for the week, and the Dow also advanced, gaining 0.68%. Investors dealt with a flurry of trade related headlines this week, especially in regards to NAFTA negotiations.

To start the week the U.S. and Mexico reached a bilateral trade deal on Monday, a headline that sent Wall Street to new all-time highs. Canada then entered the discussions to try to work out a deal with the United States, but the two sides weren’t able to reach an agreement by President Trump’s Friday deadline. However, the White House said late on Friday that talks will resume this week.

In other trade-related news, Wall Street registered its only loss of the week on Thursday following reports that President Trump wants to move forward with tariffs on $200 billion worth of Chinese goods as early as this week. In addition, Trump said in a Bloomberg interview that the EU’s offer to eliminate auto tariffs does not go far enough and compared the EU’s trade policies to those of China.

Meanwhile, on the earnings front, investors once again received quarterly results from a number of retailers last week, including results from well-known companies like Dollar General, Best Buy, lululemon athletica, Dollar Tree, Ulta Beauty, Tiffany & Co, and Burlington Stores.

The results came in mostly better-than-expected, especially for lululemon, but guidance for most of the group was more mixed, leaving the SPDR S&P Retail ETF with a modest weekly gain.

Away from earnings, Amazon climbed to new records and crossed the $2000 mark for the first time ever after Morgan Stanley raised its target price for the online retail giant to $2500 a new Street high. Meanwhile, Apple also hit new records, helped by investing legend Warren Buffett, who said he’s recently bought more shares of the world’s largest tech company.

Tesla also made headlines, moving lower after its CEO, Elon Musk, announced that he’s abandoned plans to take the electric automaker private.

As for the sector standings, seven groups finished last week in the green and four groups finished in the red. The top-performing sectors were technology, consumer discretionary, and health care. Conversely, telecoms, consumer staples, and utilities finished at the back of the pack.

Also of note, there were some important pieces of economic data released last week, including the second estimate of Q2 GDP and the July reading of the core PCE Price Index, which is the Fed’s preferred measure of inflation. Neither report elicited much of response from the stock market though.

With August now in the books, it still appears very likely that the Fed will raise rates at its September meeting, with the CME FedWatch Tool placing the chances at 98.4%. The 10 year U.S. Treasury note closed Friday at 2.86%.

Crude oil ended the week at $69.88 as falling Venezuelan output and looming U.S. sanctions on Iran supported a continued rise in prices.

September 3 – September 7 Economic Calendar

  • Monday
  • U.S. Holiday: Labor Day
  • ISM Mfg Index
    10:00 AM ET

  • Construction Spending
    10:00 AM ET
  • John Williams Speaks
    12:30 PM ET
  • John Williams Speaks
    3:00 PM ET
  • Neel Kashkari Speaks
    4:00 PM ET
  • John Williams Speaks
    5:30 PM ET
  • Raphael Bostic Speaks
    6:30 PM E
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Tuesday
  • PMI Manufacturing Index
    9:45 AM ET

  • ISM Mfg Index
    10:00 AM ET

  • Construction Spending
    10:00 AM ET
  • John Williams Speaks
    12:30 PM ET
  • John Williams Speaks
    3:00 PM ET
  • Neel Kashkari Speaks
    4:00 PM ET
  • John Williams Speaks
    5:30 PM ET
  • Raphael Bostic Speaks
    6:30 PM E
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • International Trade
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • John Williams Speaks
    12:30 PM ET
  • John Williams Speaks
    3:00 PM ET
  • Neel Kashkari Speaks
    4:00 PM ET
  • John Williams Speaks
    5:30 PM ET
  • Raphael Bostic Speaks
    6:30 PM E
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET

  • ADP Employment Report
    8:15 AM ET
  • Jobless Claims
    8:30 AM ET

  • Productivity and Costs
    8:30 AM ET
  • PMI Services Index
    9:45 AM ET
  • John Williams Speaks
    10:00 AM ET
  • Factory Orders
    10:00 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Employment Situation
    8:30 AM ET

  • Eric Rosengren Speaks
    8:30 AM ET
  • Loretta Mester Speaks
    9:00 AM ET
  • Quarterly Services Survey
    10:00 AM ET
  • Eric Rosengren speaks on Saturday
    10:45 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • John Williams Speaks
    5:30 PM ET
  • Raphael Bostic Speaks
    6:30 PM E
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM 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.