Telemus Weekly Market Review

July 30 – August 3, 2018

Stocks rose again last week as investors digested the Fed’s latest policy directive and Apple’s quarterly earnings report, which helped boost the company’s market cap above the $1 trillion mark. For the week the S&P 500 rose 0.76%, the Dow added just 0.05% and the tech-heavy Nasdaq gained 0.96%.

The Fed left interest rates unchanged as expected on Wednesday, keeping its target range at 1.75% to 2.00%, and characterized the economy as strong, signaling that the central bank is still on track to raise rates two more times this year. The next interest rate hike will likely come in September, with the CME FedWatch Tool placing the chances at 93.6%.

Overseas, the Bank of Japan (BoJ) and the Bank of England (BoE) also held policy meetings last week. The BoJ decided to leave its ultra loose monetary policy intact, but the BoE voted to raise rates for just the second time in a decade and surprised some by saying it anticipates raising rates further despite the looming uncertainty over Brexit.

In Washington, President Trump ordered his top trade representative to consider increasing proposed tariffs on $200 billion worth of Chinese goods to 25% from 10%. Beijing threatened to retaliate with tariffs on about $60 billion worth of American goods. The news didn’t have much impact on U.S. markets, but China’s Shanghai Composite lost 4.6% for the week, retesting a nearly two and a half year low.

On the earnings front, Apple dominated the headlines after releasing its fiscal Q3 results on Tuesday evening. The world’s largest tech company beat earnings and revenue estimates and issued positive guidance for Q4, helping to restore faith in the FAANG names after a disappointing report from Facebook last week.

In response, Apple shares rallied 5.9% on Wednesday and then another 2.9% on Thursday, making Apple the first ever company with a market cap of $1 trillion.

Tesla shares also soared, spiking 16.2% on Thursday, after above-consensus revenues, reaffirmed guidance, and an apology from CEO Elon Musk for last quarter’s abrasive earnings call helped the electric automaker overcome a larger than expected earnings per share loss of $3.06.

As for economic data, the July Employment Situation report was released on Friday, showing a below consensus increase in nonfarm payrolls. However, the June increase was upwardly revised to 248K from 213K, helping to offset the disappointing headline number. Average hourly earnings increased 0.3%, as expected, and the unemployment rate ticked down to 3.9%.

The 10 year U.S. Treasury note briefly traded above a 3.0% yield last week before settling on Friday at 2.95%, basically unchanged from the previous week.

Crude oil closed lower, ending Friday at $68.68 as concerns about rising inventories in the U.S. led prices lower.

August 6 – August 10 Economic Calendar

  • Monday
  • Redbook
    8:55 AM ET

  • JOLTS
    10:00 AM ET
  • Consumer Credit
    3:00 PM ET
  • Wholesale Trade
    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
  • Redbook
    8:55 AM ET

  • JOLTS
    10:00 AM ET
  • Consumer Credit
    3:00 PM ET
  • Wholesale Trade
    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
    MBA Mortgage Applications
  • Tom Barkin Speaks
    8:45 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Wholesale Trade
    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
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • PPI-FD
    8:30 AM ET
  • Charles Evans Speaks
    9:30 AM ET
  • Wholesale Trade
    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
  • Consumer Price Index
    8:30 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Treasury Budget
    2:00 PM ET
  • Wholesale Trade
    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

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.