October 7 - October 11 Week in Review

Last week the stock market endured a volatile start, but a strong end to the week helped the major averages secure gains. The S&P 500 rose 0.6%, while the Dow Jones Industrial Average and the Nasdaq Composite outperformed, gaining 0.9% respectively.

Trade-related headlines were the focus of the week for the markets, which saw the latest round of talks between officials from China and the U.S held on Thursday and Friday. The S&P 500 fell below its 50-day moving average early in the week when it was announced that 28 Chinese companies were put on a blacklist that blocks them from doing business with U.S. companies without a special license. The news led to concerns that official discussions on Thursday and Friday would not yield any results.

Vide 10.14.2019

Wednesday and Thursday led to an improved tone amid a torrent of mostly positive sounding headlines from the trade talks. The S&P 500 reclaimed its 50-day moving average on Thursday and jumped to a ten day high on Friday. The Friday session featured news about a partial trade deal being reached. Also on Friday, the Federal Reserve announced that it will begin regular purchases of Treasury bills at a pace of $60 billion per month on October 15 and continue into the second quarter of 2020 or longer.

Seven out of eleven sectors ended the week with gains. On the plus side materials and communication services led the way. On the downside, countercyclical real estate, consumer staples and utilities recorded losses.

As to individual stocks of note Apple rallied 3.9% to a fresh record high, boosted by news about increased production of components for the iPhone 11. Utility provider PG&E lost more than 25% for the week on a negative court ruling.

In the bond market the yield on the 10 year Treasury note rose to 1.74% Friday from 1.65% Thursday, its biggest one day jump since September. The 2 year Treasury closed at 1.59% as the yield curve steepened.

In other markets WTI crude closed at $54.66 a gain of 3.5% on the week and the U.S. Dollar Index closed at 98.33 a slight drop from last Friday’s close.

Overseas tensions appeared to calm in Europe, too. British Prime Minister Boris Johnson and his Irish counterpart, Leo Varadkar, unexpectedly said they saw a chance of a Brexit deal. The British pound jumped against the dollar, recording its biggest two-day gain since December 2008, while shares of U.K. banks and homebuilders advanced as investors grew more optimistic about the U.K.’s divorce deal with the European Union.

October 14 – October 18 Economic Calendar

  • Monday

  • Tuesday
  • Empire State Mfg Survey
    8:30 AM ET
  • Redbook
    8:55 AM ET

  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Retail Sales
    8:30 AM ET
  • Atlanta Fed Business Inflation Expectations
    10:00 AM ET
  • Business Inventories
    10:00 AM ET
  • Housing Market Index
    10:00 AM ET
  • Beige Book
    2:00 PM ET
  • Treasury International Capital
    4:00 PM ET
  • Thursday
  • Housing Starts
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • Industrial Production
    9:15 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Leading Indicators
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This 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.

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