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Weekly Update – September 13, 2019

  • U.S. stocks rose for a third consecutive week on thawing U.S.-China trade tensions and strong U.S. consumer spending data. Weekly gains held despite Friday’s quiet but mixed session when the Dow rose 37.07 points to close at 27219.52 while the S&P 500 and Nasdaq Composite eased 2.18 points to 3007.39 and 17.75 points to 8176.71, respectively. Elsewhere, the stronger U.S. economic data helped extend a U.S. Treasuries September weakening streak, driving the 10-year yield to 1.9%, its highest level since early August.
  • China on Friday said it would not impose new tariffs on certain U.S. agricultural products after U.S. President Trump said earlier in the week that the U.S. would delay a $250 billion tariff increase on Chinese imports that was set to take effect on October 1.
  • As expected, the European Central Bank unveiled a broad easing package, including cutting its deposit rate by 10 bps to negative-0.50% and an open-ended Quantitative Easing initiative of €20B a-month starting in November. The bank also said it will tie future rate guidance to meeting its inflation objective, rather than being contingent on a timeframe. The move was aimed at addressing Eurozone’s struggling economy.
  • Another quarter-point rate reduction is widely expected at this week’s FOMC meeting. If the Fed eases rates again, it will be the second such movement since July when rates were lowered for the first time since 2008.
  • Retail sales, increased 0.4% in August from a month earlier. The strong report beat expectations and added to a robust 0.8% increase in spending in July. August’s robust numbers were led by a 1.8% jump in auto purchases, a sign consumers felt comfortable making big-ticket purchases.
  • Job openings decreased in July from a year earlier for the second consecutive month. Job postings fell 3% in July to 7.217 million after declining 2% in June.
  • The University of Michigan’s consumer sentiment for the U.S. rose to 92 in September from 89.8 in August. The print came in above market consensus of 90.9. The uptick was across both current and expected economic conditions.

CPWM Weekly Market Monitor (2019.09.13)

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