Telemus Weekly Market Review

June 25 – June 29, 2018

Stocks in the U.S. declined for the second week in a row as investors continued to focus on trade tensions between the U.S. and China. The S&P 500 fell 1.33% for the week while the Dow Jones Industrial Average did slightly better dropping 1.26%. The tech-heavy Nasdaq Composite was the worst performer sliding 2.4%.

Trade war fears weighed at the start of the week due to reports that the White House is looking to bar Chinese companies from investing in U.S. tech firms. The Trump administration first responded to the reports with a mixed message; Treasury Secretary Steven Mnuchin said the White House is targeting all countries, not just China, while President Trump’s top trade adviser, Peter Navarro, said the administration doesn’t have any plans to impose investment restrictions, regardless of the country.

However, the Trump administration eventually cleared things up, deciding to defer foreign investment regulation to the Committee on Foreign Investment in the United States (CFIUS). That decision was seen as a positive alternative to direct White House intervention and helped the equity markets rebound in the latter part of the week.

Separately, the U.S. State Department threatened to impose powerful sanctions on countries that don’t cut oil imports from Iran to “zero” by November 4th. That headline, paired with a larger than forecasted draw down in U.S. crude inventories, pushed crude prices back to a three-and-a-half year high. WTI crude futures added 8.1% for the week, closing at $74.12 per barrel on Friday.

Also out of Washington, Supreme Court Justice Anthony Kennedy announced his retirement, effective July 31st. Although he identifies mostly as a conservative, Mr. Kennedy has often sided with his more liberal colleagues. His retirement gives President Trump, who plans on announcing his replacement choice on July 9th, the chance to strengthen the court’s current conservative majority.

In corporate news, Amazon again made headlines after announcing a deal to acquire online pharmacy start-up PillPack. That news sent shares of drug distributors like CVS Health and Walgreens Boots Alliance solidly lower on the week. Amazon also announced it is inviting entrepreneurs to form small companies to carry packages over the last leg of the delivery journey.

Elsewhere in corporate news, General Electric announced plans to spin off its health care business and to sell its 62.5% stake in oil and gas company Baker Hughes. Also Walt Disney won DOJ approval to buy most of Fox’s assets for $71.3 billion, subject to the condition that Disney sells 22 regional sports networks. Finally Nike rose to a new record on Friday after beating both top and bottom line estimates and announcing a new $15 billion share repurchase program.

As for this week’s S&P sector standings, utilities, telecom services, real estate, and energy were the top-performing groups, while the technology, financials, consumer discretionary, and health care sectors finished at the bottom of the pack.

On the interest rate front the 10 year U.S. Treasury note ended the week at 2.86%, a slight drop from last week’s close.

July 2 – July 6 Economic Calendar

  • Monday
  • PMI Manufacturing Index
    9:45 AM ET
  • ISM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • FOMC Minutes
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET

  • Money Supply
    4:30 PM ET
  • Tuesday
  • Redbook
    8:55 AM ET
    Redbook

  • Factory Orders
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • FOMC Minutes
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET

  • Money Supply
    4:30 PM ET
  • Wednesday
  • July 4th Holiday
  • ISM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • FOMC Minutes
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET

  • Money Supply
    4:30 PM ET
  • Thursday
  • MBA Mortgage Applications
    7:00 AM ET
  • Challenger Job-Cut Report
    7:30 AM ET
  • ADP Employment Report
    8:15 AM ET
  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • FOMC Minutes
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET

  • Money Supply
    4:30 PM ET
  • Friday
  • Employment Situation
    8:30 AM ET

  • International Trade
    8:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Treasury STRIPS
    3:00 PM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • FOMC Minutes
    2:00 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.