Weekly Economic Update 08/20/2018

MID-SUMMER MEANT BUYING FOR CONSUMERS

According to new Census Bureau data, retail sales were 0.5% improved in July. Core retail sales (all categories except car and truck buying) rose 0.6% last month. The only sour note was the revision the Bureau made to June’s headline and core retail sales advances. The overall June retail sales gain was reduced to 0.2% from 0.5%; the core gain, to 0.2% from 0.4%.1,2

HOUSEHOLD SENTIMENT GAUGE DISAPPOINTS

In its initial August edition, the University of Michigan’s index of consumer sentiment fell 2.6 points to 95.3. That was a miss: analysts polled by Briefing.com expected a reading of 97.8. This preliminary August reading was also an 11-month low for the index.1,2

A MINOR JULY GAIN FOR HOUSING STARTS

A new federal government report showed residential construction activity up 0.9% last month. Building permits increased 1.5% after three months of retreats.3

DOW LEADS THE WAY ON WALL STREET

Ascending 1.41% over five market days, the Dow Jones Industrial Average closed Friday’s trading session at 25,669.32. The S&P 500 also had a positive week, advancing 0.59% to 2,850.13. The same was not true for the Nasdaq Composite. The tech-heavy benchmark lost 0.29% last week to finish at 7,816.33, Friday. Also notable: gold’s weekly loss of 2.9%. A strong dollar has put pressure on the yellow metal of late, and this past week was gold’s worst on the COMEX in 15 months.2,4

THIS WEEK

  • On Monday, Estee Lauder presents second-quarter results.
  • Tuesday’s earnings roll call includes announcements from Coty, Kohl’s, La-Z-Boy, Medtronic, J.M. Smucker, and Urban Outfitters.
  • Analog Devices, Lowe’s, Stein Mart, and Target offer earnings on Wednesday; in addition, investors will consider minutes from the most recent Federal Reserve policy meeting and July existing home sales figures.
  • July new home sales data is out Thursday, plus the latest initial claims report and earnings from Alibaba Group, Gap, Hormel Foods, HP, Intuit, and Toro.
  • Federal Reserve Chairman Jerome Powell gives a speech on monetary policy Friday morning at the Kansas City Fed’s annual Jackson Hole economic policy symposium; away from Jackson Hole, Foot Locker announces quarterly earnings and data on July hard goods orders arrives.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA 3.84 18.02 14.04 12.36
NASDAQ 13.22 25.63 23.39 22.34
S&P 500 6.60 17.30 14.43 12.29
REAL YIELD 8/17 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.79 0.42 0.68 1.67

Sources: wsj.com, bigcharts.com, treasury.gov – 8/17/184,5,6,7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.


WEEKLY TIP

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CITATIONS:
1 – briefing.com/investor/calendars/economic/2018/08/13-17
2 – marketwatch.com/story/weaker-gold-heads-for-3-weekly-drop-2018-08-17
3 – reuters.com/article/us-usa-economy-housingstarts/us-housing-starts-rise-less-than-expected-in-july-idUSKBN1L11FI
4 – markets.wsj.com/us
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F17%2F17&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F17%2F17&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F17%2F17&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F16%2F13&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F16%2F13&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F16%2F13&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F18%2F08&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F18%2F08&x=0&y=0
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F18%2F08&x=0&y=0
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll