September 9 – September 13 Week in Review

It was another good one for the U.S. stock market as it extended its winning streak to three weeks. Value oriented sectors led the markets higher and closer to all-time highs. The S&P 500, which rose 1.0%, climbed back above the 3000 level while the Dow Jones Industrial Average, up 1.6%, rose back above 27000. The Nasdaq Composite did well, too gaining 0.9%. The small-cap Russell 2000 was the star performer, up 4.9%.

Video 09.16.2019

Improved outlooks for trade and growth helped generate renewed buying interest in value stocks, or those with less demanding valuations. The trade-sensitive Philadelphia Semiconductor Index advanced 2.4%. The S&P 500 financials and energy sectors, the SPDR S&P Retail ETF, and Dow Jones Transportation Average posted sizable gains as well.

Yesterday’s winners have suddenly become today’s losers. Former popular ideas like U.S. Treasuries, highly-valued growth stocks, and defensive-oriented stocks have fallen out of favor. The S&P 500 information technology, consumer staples, and real estate sectors all finished in negative territory last week.

The selloff in the Treasury market drove the 2 year yield up 27 basis points to 1.79% and the 10 year yield up 35 basis points to 1.90%. A stronger than expected 0.3% increase in core CPI for August further pressured Treasury yields.

Contributing to the improved outlook for trade included a series of positive sounding trade developments. President Trump said he will delay the tariff rate increase on $250 billion of Chinese imports to Oct. 15 from Oct. 1 at China's request. China exempted certain U.S. products from a higher tariff rate, including pork and soybeans. Late in the week President Trump said he would at least consider an interim trade deal.

From a growth perspective, economic data continued to suggest the U.S. consumer could continue to support growth and ward off a recession. For instance, weekly initial jobless claims remained at historically low levels, retail sales increased 0.4% in August, and consumer sentiment rebounded in September.

Mario Draghi’s announcement of more accommodative measures were another boost for equities last week. The ECB cut its deposit rate to -0.5% from -0.4% and said it will restart buying back bonds at a monthly pace of €20 billion euros, a process known as quantitative easing, starting Nov. 1.

In other markets the U.S. Dollar Index declined 0.2% to 98.20. WTI crude fell 2.8% last week to $54.88 a barrel, as a series of bearish news event rattled the oil markets. President Trump was reportedly in talks to ease sanctions on Iran. OPEC downgraded its forecasts for oil demand in 2019 and 2020 and the ECB lowered its eurozone growth forecasts for 2019 and 2020.

September 9 – September 13 Economic Calendar

  • Monday
  • Empire State MFG Survey
    8:30 AM ET
  • Tuesday
  • FOMC Meeting Begins
  • Redbook
    8:55 AM ET
  • Industrial Production
    9:15 AM ET
  • Housing Market Index
    10:00 AM ET
  • Treasury International Capital
    4:00 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Housing Starts
    8:30 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Meeting Announcement
    2:00 PM ET
  • FOMC Forecasts
    2:00 PM ET
  • Fed Chair Press Conference
    2:30 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • Current Account
    8:30 AM ET
  • Existing Home Sales
    10:00 AM ET
  • Lending Indicators
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • 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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