The stock market finished the week largely up notwithstanding downward pressure from the U.S. and China trade-talks as tech stocks rallied.  Interest rates rose with the 10-year treasury yield rising 5 basis points to 2.99% despite mild inflationary data.  The spread between the 10-year treasury yield and the 2-year treasury yield was virtually unchanged, widening by 1 basis point to 0.23%.  The price of gold continues to trend downward, dropping 0.23% to $1,198.90 an ounce.  The price of crude increased 1.57% to $68.96 a barrel despite reports of the global oil supply reaching a record high in August.  The U.S. dollar index saw a moderate decrease from 95.38 to 94.98.

 

Index Started Week Ended Week Change Change % YTD %
DJIA 25,916.54 26,154.67 238.13 0.92% 5.81%
Nasdaq 7,902.54 8,010.04 107.50 1.36% 16.03%
S&P 500 2,871.68 2,904.98 33.30 1.16% 8.65%
Russell 2000 1,713.18 1,721.72 8.54 0.50% 12.13%

 

THIS WEEK’S HIGHLIGHTS

 

  • Producer Prices of U.S. goods and services fell by 0.1% in August. However, over the trailing 1-year, producer prices have risen a moderate 2.8%.  Excluding the volatile food and energy components, producer prices have risen 2.3% over the trailing 1-year.

 

  • Consumer Prices of U.S. goods and services, a measure of inflation, rose by 0.2% in August. Year-over-year consumer prices have risen a comfortable 2.7%.  Excluding the volatile food and energy components, consumer prices rose 2.2% over the trailing 1-year, slightly above the Fed’s 2.0% target.

 

  • Initial unemployment claims came in at 204,000 for the week ending September 8th, reaching a 50-year low. Continuing unemployment claims were virtually unchanged settling at 1.71 million, and remain at its 46-year low.

 

  • Retail sales recorded a 0.1% gain in August, its smallest increase in 6-months. However, August’s underwhelming gain was offset by a 0.2% upward revision in July’s report, which resulted in a 0.7% increase for that month.

 

  • Industrial production was up 0.4% in August, its third straight increase. Over the trailing 1-year, industrial production output is up 4.9%.  Manufacturing output rose 0.2% in August, despite a strong 4.0% increase in motor vehicle output.

 

RECOMMENDED READING

This article tackles the difficult question of how much you should/want to leave for your children, and how this amount can determine how hard you work.

https://radreads.co/how-much-your-kids-will-inherit-should-impact-how-hard-you-work/

 

TIDBITS

September has historically been the worst performing month for the stock market.  Many have opined ideas as to why this phenomenon occurs, but no decisive reason has been determined.  Two of the most common explanations for this underperformance are:

  1. Many mutual funds’ fiscal year ends in September and tend to sell losing positions at that time.
  2. Many investors sell stocks in September to pay for their children’s college tuition.

Since the beginning of September, the stock market has been virtually flat.  This likely leaves February to be the stock market’s worst performing month in 2018.

 

QUOTE OF THE WEEK

 “There seems to be some perverse human characteristic that likes to make easy things difficult.”

– Warren Buffet

 

 

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