Telemus Weekly Market Review

September 3 – September 7

Investors returned from the holiday weekend in a selling mood, pulling stocks down from their record highs. The S&P 500 ended the week lower by 1.03% and the tech heavy Nasdaq Composite dropped 2.55%. The Dow Jones Industrial Average showed some strength, but still finished down 0.19% for the week.

The week kicked off with Amazon becoming the second U.S. company to reach a market cap of $1 trillion and Nike unveiling an ad for the 30th anniversary of its “Just Do It” campaign featuring Colin Kaepernick, the controversial former San Francisco 49ers quarterback credited with starting the national anthem protests, which created quite a stir and even drew comments from President Trump on Twitter.

On Tuesday Gulf Coast residents braced for Tropical Storm Gordon to make landfall, which it did that evening. Oil prices rallied in anticipation of the storm disrupting crude production, but gave back all of those gains on Wednesday after the storm turned out to be less damaging than feared. Oil prices then fell further on Thursday when the EIA’s weekly inventory report showed a 4.3 million barrel drop in crude stockpiles, but a 1.8 million barrel jump in inventories of gasoline. In total, WTI crude futures lost 2.9% for the week, settling Friday at $67.76, dragging the oil-sensitive energy sector lower by 2.3%.

The top-weighted information technology sector also underperformed last week, dropping 2.9%. Within the group, social media names were in focus after Facebook’s COO, Sheryl Sandberg, and Twitter’s CEO, Jack Dorsey, testified before the Senate Intelligence Committee on Wednesday morning, defending their efforts to prevent election meddling. Mr. Dorsey also appeared before the House Energy and Commerce Committee in the afternoon, rebuking allegations that Twitter promotes certain political ideologies. The hearings didn’t really produce any new information, but that didn’t prevent Facebook and Twitter shares from tumbling 2.3% and 6.1% respectively on Wednesday.

On the trade front, U.S.-China trade tensions resurfaced at the end of the week, as many thought the White House would impose tariffs on $200 billion worth of Chinese goods on Thursday at midnight following the end of a public comment period. That didn’t happen, but President Trump did raise the stakes on Friday, saying that he’s got another tranche of tariffs on $267 billion of Chinese goods “ready to go” if Beijing retaliates to the $200 billion tranche.

On a related note, trade talks between the U.S. and Canada resumed after the two sides failed to reach an agreement the previous week. As of Friday’s closing bell, officials still had not reached an agreement.
In economic data, the Employment Situation report for August was released on Friday morning, causing some early selling due to a higher than expected increase in average hourly earnings, which ignited some fears that inflation might be picking up. However, the realization that the economy is still strong, evidenced by a larger than expected increase in nonfarm payrolls and an unemployment rate of 3.9%, helped limit losses.

As for the Fed, Friday’s jobs report virtually locked in a September rate hike and increased the chances of a December rate hike to 79.8% from 72.8% on Thursday. The 10 year U.S. Treasury note closed at 2.94%, an increase of 8 basis points on the week, with most of the gain coming on Friday in reaction to the employment report.

September 10 – September 14 Economic Calendar

  • Monday
  • Raphael Bostic Speaks
    11:30 AM ET
  • TD Ameritrade IMX
    12:30 PM ET
  • Consumer Credit
    3:00 PM ET
  • Wholesale Trade
    10:00 AM ET
  • Beige Book
    2:00 PM 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
  • Wholesale Trade
    10:00 AM ET
  • Beige Book
    2:00 PM 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
  • Atlanta Fed Business Inflation Expectations
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Beige Book
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Thursday
  • CPI
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Raphael Bostic Speaks
    12:30 PM ET
  • Treasury Budget
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • Friday
  • Retail Sales
    8:30 AM ET

  • Import and Export Prices
    8:30 AM ET
  • Charles Evans Speaks
    9:00 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.