Stocks finished the week mostly higher despite steep losses earlier in the week.  Officials from both China and the U.S. announced Thursday that talks are scheduled next week in hopes of resolving ongoing trade disputes.  Officials are hoping that the two countries can come to an agreement by November.  Treasury yields managed to pare loses from earlier in the week.  The 10-year treasury ended the week at 2.86%.  The spread between the 10-year treasury yield and the 2-year treasury yield also dropped to 0.25%, 3 basis points lower than the week prior.  The price of gold moved slightly lower, dropping 0.82% to $1,185.20 an ounce.  The price of crude oil dropped 2.60% to $65.89 a barrel as an abundance of supply continues to cause headwinds.  The U.S. dollar index dropped to 96.11 from 96.34.

 

Index Started Week Ended Week Change Change % YTD %
DJIA 25,313.14 25,669.32 356.18 1.41% 3.84%
Nasdaq 7,839.11 7,816.33 -22.78 -0.29% 13.22%
S&P 500 2,833.28 2,850.13 16.85 0.59% 6.60%
Russell 2000 1,686.80 1,692.95 6.15 0.36% 10.25%

 

THIS WEEK’S HIGHLIGHTS

 

  • Retail sales increased 0.5% for the month of July, this is after retail sales rose by 0.5% in June. The strong increase in July was about the consensus estimate of 0.1%.  Despite a downward trend in unit sales, auto sales managed a positive growth of 0.2%.  Restaurant, gasoline, and e-commerce sales all saw sale increases in July.

 

  • Industrial production managed to grow by only 0.1% in July compared to a 0.6% reported increase in June. The real positive news from this report was the upward revision of June’s reported 0.6% increase to a 1.0% overall gain.  The upward revision in June numbers was due to a revision in mining from 1.2% to 2.9% and utilities revised to a decline of only 0.7% vs. the 1.5% decline reported.

 

  • Housing starts rose 0.9% in July to 1.168 million but fell below the consensus range of 1.2 – 1.3 million starts. High costs of lumber due to tariffs and a lack of construction labor are responsible for the slow growth after a decline in June housing starts.  On the other hand, housing permits showed strong growth of 1.5% in July.

 

  • Initial unemployment claims declined by 2,000 for the week ending August 11th to a total of 212,000. The 4-week average did tick higher to 215,500 but is still down month to month, an indication of an expected strong August employment report.

 

QUOTE OF THE WEEK

“Would you like me to give you a formula for success?  It’s quite simple, really: Double your rate of failure.  You are thinking of failure as the enemy of success.  But it isn’t at all.  You can be discouraged by failure or you can learn from it, so go ahead and make mistakes.  Make all you can.  Because remember that’s where you will find success.”

– Thomas J. Watson

 

 

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