Weekly Market Review - September 6, 2018

Weekly Market Review - September 6, 2018

by Chad Hassinger on Sep 6, 2018

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

"If you stick with the herd, you could end up as a lamb chop."  Al Gindi

Weekly look back:
  1. GDP was ratcheted up to 4.2% for the second quarter.  Inventories were less of a drag on the number and government purchases were larger than expected.
  2. Based upon what we know now the odds of a rate rise later this month is extremely high.  The favored Fed inflation gauge, PCE, reported a 2.3% increase, slightly above the Fed target of 2.0%.
  3. Investors have pushed US equity markets up 5 months in a row.  September has normally been a difficult month for the markets.  However, sentiment continues to be strong with some concerns about inflation and the current conditions yet overall longer term positive.
Weekly look ahead:
  1. US payrolls dipped to 157k last month conversely expectations are high for a solid number this month along with the Unemployment rate dropping to 3.8%.  Average earnings should come in at a strong .3% advance with a year over year growth at a respectable 2.8%.
  2. Both ISM Manufacturing and ISM Services (Non-Manufacturing) report this week.  Manufacturing has roared back recently as New Orders have been unexpectedly robust.
  3. Traders are coming back from the beach this week and we should start to see more volatility as investors turn their attention to mid-term elections and geopolitical risks.
World Macro highlights for this week: 

Wednesday: Motor Vehicle Sales, International Trade
Thursday: Productivity and Costs, Factory Orders, ISM Non-Manufacturing
Friday: US Jobs

2018 Yearly Index Returns as of 8/31/2018

S&P 500 

9.79%

Europe Equity

-3.66%

Emerging Equity

-7.67%

US 10 Yr

+.46 bp

US Small Cap Stocks

14.16%

 

Graph Of The Week

Productivity is central to economic growth.  It measures output versus labor costs.  The goal is to have higher output per labor unit.

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