Telemus Weekly Market Review

September 10 – September 14, 2018

The stock market returned to its winning ways last week, powering through trade related headlines (again) and Hurricane Florence, one of the strongest storms in years to hit the Carolinas. The S&P 500 gained 1.16%, the tech-heavy Nasdaq Composite rose 1.36%, and the blue-chip Dow Jones Industrial Average climbed 0.92%.

Hurricane Florence was largely the talk of the week, forcing residents near the Carolina coast to either flee for safer territory or hunker down. The storm weakened to a Category 1 from a Category 4 before it made landfall on Friday however, which helped the market keep a positive bias. WTI crude futures were once up nearly 4.0% on the week, but gave back the majority of that as the storm weakened, closing Friday at $68.98 a barrel.

Meanwhile, on the trade front, the White House confirmed reports that it has proposed a new round of trade talks with China, a proposition that was welcomed by Beijing. However, President Trump stirred the pot a bit with a tweet on Thursday, saying the U.S. isn’t under pressure to make a deal with China; rather, China is under pressure to make a deal with the United States.

Speaking of China, its major stock index, the Shanghai Composite, fell 0.8% last week, touching its lowest level since January 2016.

In other news, President Trump is reportedly considering a second meeting with North Korean leader Kim Jong-un ahead of the November midterm elections. The two leaders held a historic summit in June, but relations have cooled since, due to North Korea’s unsatisfactory progress towards denuclearization.

On Wednesday Apple unveiled a trio of new iPhones at its annual product event, extending last year’s high-end iPhone X line, which was created in celebration of the iPhone’s 10th anniversary. Apple shares added 1.2% on the week.

The top-weighted technology sector was among the top-performing groups last week, rebounding from the prior week’s disappointing performance, with a gain of 1.8%. In total, ten of eleven groups finished in positive territory. Cyclical sectors generally outperformed, although the heavily-weighted financial space did not, finishing lower by 0.4%.

On the economic data front, investors received some influential inflation data last week, including the core Producer Price Index for August and the core Consumer Price Index for August. The core PPI declined 0.1%, versus an expected increase of 0.2%, and the core CPI showed a less than expected increase of 0.1%.

Those readings helped to ease fears that the Fed might have to be more aggressive in raising rates in order to keep the economy from overheating.

In monetary policy, a trio of central banks released their latest policy decisions last week, including the European Central Bank, the Bank of England, and the Central Bank of Turkey. Both the ECB and the Bank of England kept interest rates unchanged, as expected, but Turkey’s central bank increased its benchmark rate to 24.0% from 17.75%, attempting to stabilize the Turkish lira, which has plunged of late.

The Fed is expected to raise rates by 25 basis points at its September 25-26 policy meeting, with the market placing the chances of a rate hike at 100%. The10 year U.S. Treasury note closed at 2.99%, roughly 5 basis points higher than last week’s close.

September 17 – September 21 Economic Calendar

  • Monday
  • Empire State Mfg Survey
    8:30 AM ET
  • Housing Market Index
    10:00 AM ET

  • 4-Week Bill Auction
    11:30 AM ET
  • Treasury International Capital
    4:00 PM 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
  • Housing Market Index
    10:00 AM ET

  • 4-Week Bill Auction
    11:30 AM ET
  • Treasury International Capital
    4:00 PM 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
  • Housing Starts
    8:30 AM ET
  • Current Account
    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
  • Jobless Claims
    8:30 AM ET

  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • Existing Home Sales
    10:00 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
  • PMI Composite FLASH
    9:45 AM ET

  • Baker-Hughes Rig Count
    1:00 PM ET

  • 4-Week Bill Auction
    11:30 AM ET
  • Treasury International Capital
    4:00 PM 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.