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Weekly Updates

Weekly Update – August 30, 2019

  • U.S. stocks posted their first weekly gain since July as global markets rallied and volatility declined. Overseas investors bid up U.S. stocks and bonds, seeking better returns than they could get at home. Despite an upcoming tariff deadline, renewed optimism about China trade talks also lifted stocks.
  • Falling interest rates drove demand for long-term U.S. Treasurys, intensifying the inversion of the yield curve. The ten-year yield dipped to a low of 1.449% on Monday, then closed the week at 1.500%.
  • Crude oil prices rose as reserves shrank; gold prices declined as “risk-on” sentiment took the stage. The U.S. dollar, as measured by the DXY index, rose steadily on the week.
  • Real U.S. personal consumption expenditures increased $56.9 billion during July, a 0.4% gain over June and a 4.7% annual rate. Personal income increased $23.9 billion, or 0.1%, in nominal dollars.
  • August consumer confidence slipped 0.7 points to 135.1 from July’s 135.8. The expectations index declined from 112.4 to 107.0, whereas the present situation index rose 6.3 points to 177.2, its highest level in nearly 19 years.
  • The S&P CoreLogic Case-Shiller national home price index rose at an annual rate of 3.1% in June, representing a decline from 3.3% in May. July pending home sales were down 2.5% to 105,600, mostly reversing June’s 2.8% rise.
  • The second estimate for 2Q19 U.S. GDP was revised down from 2.1% to 2.0%, primarily due to decreases in state and local government spending, as well as private inventory and residential investment.
  • The Chicago Fed National Activity Index fell from 0.03 in June to -0.36 in July, mainly reflecting impacts from production-related indicators. Total industrial production decreased 0.2%; manufacturing production decreased 0.4%.
  • Headline durable goods orders rose 2.1% in July, but core capital goods shipments, which feed into GDP, fell by 0.7%. Separately, Chicago PMI rose to 50.4 in August from 44.4 in July, above the 50 threshold for expansion, though the three month average was in contraction at 48.2.
  • The Ifo business climate index, a gauge of German business confidence, fell from 95.8 in July to 94.3 in August, the lowest reading since November 2012.

CPWM Weekly Market Monitor (2019.08.30)


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