September 2, 2019

In this week’s recap: Wall Street finishes August with a rally, China decides to pause a potential response to oncoming U.S. tariffs, and two consumer confidence indices send different messages.

THE WEEK ON WALL STREET

Fears of an impasse in the U.S.-China trade dispute lessened last week. While additional U.S. tariffs on Chinese imports were scheduled to take effect on September 1, China’s government communicated that it would refrain from taking retaliatory measures for the moment.

U.S. stock benchmarks advanced during the week. The S&P 500 rose 2.79% across five trading days, and the Nasdaq Composite and Dow Jones Industrial Average respectively gained 2.72% and 3.02%. The MSCI EAFE international index added just 0.25%.1,2

Positive News in the Trade Dispute

Thursday, a spokesman for China’s commerce ministry said that negotiations could resume this month, and that discussions need to focus on “removing the new tariffs to prevent escalation.”

In addition, officials in Beijing indicated they would hold off on responding to the U.S. tariff hikes announced Friday by the White House.3

Mixed Consumer Confidence Signals

The Conference Board’s monthly Consumer Confidence Index was at 135.1 in August. Analysts polled by Reuters had projected a reading of 129.5. Consumers’ view of the present economic situation was the best since November 2000.

On the other hand, the University of Michigan’s monthly Consumer Sentiment Index (based on a different collection of survey data) dropped 8.6 points during August to 89.8; that was its biggest monthly descent in nearly seven years.4,5

WHAT’S NEXT

After a pause for the Labor Day holiday, U.S. financial markets have an abbreviated trading week. The August jobs report may influence Friday’s Wall Street session, and any news pertaining to U.S.-China trade talks could also influence the markets.

Tip of the Week

If you still receive paper bank statements, you should know that there could be a financial perk for going digital: some financial institutions may offer you lower fees in return for your choice to manage your money online.

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Institute for Supply Management releases its August Purchasing Managers Index (PMI) for the factory sector, assessing U.S. manufacturing activity.

Thursday: ISM presents its August PMI for the service sector, and payroll giant ADP publishes its latest private-sector employment snapshot.

Friday: The Department of Labor offers its August employment report.

Source: Econoday / MarketWatch Calendar, August 30, 2019
The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Wednesday: Palo Alto Networks (PANW), Slack Technologies (WORK)

Thursday: Lululemon Athletica (LULU)

Source: Zacks, August 30, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Quote of the Week

“Take rest; a field that has rested gives a bountiful crop.”

OVID

Riddle of the Week

When I was 2 years old, my brother was half my age. Now I am 100 years old, how old is my brother?

LAST WEEK’S RIDDLE: A crook steals $100 from a cash register. The crook returns an hour later with the same $100 and buys $70 in items, receiving $30 in change. How much does the merchant lose?

ANSWER: $100. The shop loses $70 worth of goods, plus $30 dollars in cash. It is as if the merchant gave the goods out for free as well as $30.

Valley Oak Wealth Management can be reached at 415.898.4439 info@valleyoakwm.com or ValleyOakWM.com

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Tim Russel is a Wealth Advisor with, and securities offered through, LPL Financial member FINRA/SIPC
This material does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:
1 – wsj.com/market-data [8/30/19]
2 – quotes.wsj.com/index/XX/990300/historical-prices [8/30/19]
3 – marketwatch.com/story/dow-futures-up-over-250-points-as-china-tamps-down-fears-of-further-trade-war-escalation-2019-08-29 [8/29/19]
4 – cnbc.com/2019/08/27/us-consumer-confidence-august-2019-index-dips.html [8/27/19]
5 – sca.isr.umich.edu/ [8/30/19]
CHART CITATIONS:
wsj.com/market-data [8/30/19]
quotes.wsj.com/index/SPX/historical-prices [8/30/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [8/30/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [8/30/19]