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Weekly Updates

Weekly Update – August 16, 2019

  • Stocks ended another volatile week in the red. Investors got spooked by an inversion of the two-to-ten-year U.S. Treasury yield spread, the first since 2007 — you may recall what happened after that. At one point, the 30-year Treasury yield traded as low as 1.979% and the 10-year retraced multiyear lows. Hints of forceful stimulus from the European Central Bank and strong U.S. retail sales helped offset fears of weak global manufacturing and a less accommodative Federal Reserve, but the uplift wasn’t enough to bring stocks across into the black.
  • Economic angst drove gold prices upward along a choppy path. Oil prices were volatile too, with slight gains as tensions mounted in the Strait of Hormuz. The 10-year Treasury finished at 1.544%. The U.S. dollar gained against a basket of currencies.
  • July retail sales rose 0.4 percentage point to 0.7%, beating the 0.3% estimate; the best print in four months. Retail sales ex-autos rose 1.0%.
  • The preliminary reading of the U. of Michigan’s consumer sentiment index fell from 98.4 in July to 92.1 in August, a seven month low. Respondents cited the recent rate cut and higher prices from tariffs as reasons to curtail spending.
  • The Consumer Price Index rose 0.3% in July, ahead of June’s 0.1%; annual CPI was up 1.8%. Core CPI, excluding food and energy, rose 0.3%, unchanged from June; its annual rate hit 2.2%.
  • The Empire State Manufacturing Survey was up 0.5 points in August to 4.8. New orders reversed two months of contraction. The Philadelphia Fed Manufacturing Business Outlook fell 5.0 points to 16.8. July industrial production contracted by 0.2% versus an expected expansion of 0.2%; manufacturing production declined by 0.4%.
  • The NAHB housing market index reached 66 in August, beating the 65 estimate.
  • The NFIB Small Business Index rose 1.4 points in July to 104.7. Expectations rose for business conditions, real sales and expansion.
  • China’s year-over-year industrial output slowed from 6.3% in June to 4.8% in July. Retail sales growth slowed from 9.8% to 7.6%. Unemployment ticked up from 5.1% to 5.3%. The German economy contracted by 0.1% in 2Q19 versus the prior quarter’s 0.4% expansion.

CPWM Weekly Market Monitor (2019.08.16)

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