The Markets
Last week domestic equities managed to build on the gains of the week
before. The Dow industrials finally returned to positive territory for
the year, and the Nasdaq had the kind of weekly gain it hasn't seen
since late May. Meanwhile, geopolitical tensions helped spur interest in
the relative safety of the benchmark 10-year Treasury, cutting the
yield to its lowest level since June 2013.
Last Week's Headlines
- Auto and department store sales
declined in July, while grocery stores, gas stations, restaurants,
clothing stores, and building supply stores all saw gains. That left
total retail sales essentially flat for the month, though the Commerce
Department said they were up nearly 4% from a year earlier.
- Wholesale prices rose 0.1% in July,
according to the Bureau of Labor Statistics. That was slightly less than
June's 0.4% increase, and cut the annual wholesale inflation rate for
the last 12 months to 1.7% from June's 1.9%. The biggest monthly
increases were seen in transportation and warehousing, which were up
0.5%, while wholesale food costs rose 0.4% and energy prices fell 0.6%.
- Led by a 10.1% increase in auto
manufacturing, U.S. industrial production rose 0.4% in July, according
to the Federal Reserve. The overall increase represented the sixth
straight monthly gain. Even aside from the surge in autos, production
was up 0.2%, and the percentage of the nation's manufacturing capacity
that's being used rose to 79.2%.
- After the Fed's Empire State
manufacturing survey hit a four-year high, the August report showed that
improvement had slowed substantially as the reading fell 11 points to
14.7.
- Sluggish economic recovery in the
18-member eurozone stalled completely during Q2 as growth fell from 0.2%
in Q1 to 0. More worrisome was the -0.2% decline in both the German and
Italian economies, which are two of the tentpoles of the region's
economy. The larger 28-member European Union saw a 0.2% increase in
gross domestic product, and the official EU statistics agency said GDP
had risen in both areas compared to a year earlier (0.7% for the
eurozone and 1.2% for the EU).
Eye on the Week Ahead
Speeches at the Fed's annual Jackson Hole conference could influence
markets given the internal debate over the timing of interest rate
hikes. Investors will continue to monitor the situations in Ukraine,
Gaza, and Iraq, and housing and consumer inflation data also are on tap.
Data sources: Economic: Based on
data from U.S. Bureau of Labor Statistics (unemployment, inflation);
U.S. Department of Commerce (GDP, corporate profits, retail sales,
housing); S&P/Case-Shiller 20-City Composite Index (home prices);
Institute for Supply Management (manufacturing/services). Performance:
Based on data reported in WSJ Market Data Center (indexes); U.S.
Treasury (Treasury yields); U.S. Energy Information
Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing,
OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency
exchange rates). All information is based on sources deemed reliable,
but no warranty or guarantee is made as to its accuracy or completeness.
Neither the information nor any opinion expressed herein constitutes a
solicitation for the purchase or sale of any securities, and should not
be relied on as financial advice. Past performance is no guarantee of
future results. All investing involves risk, including the potential
loss of principal, and there can be no guarantee that any investing
strategy will be successful.
The Dow Jones Industrial Average
(DJIA) is a price-weighted index composed of 30 widely traded blue-chip
U.S. common stocks. The S&P 500 is a market-cap weighted index
composed of the common stocks of 500 leading companies in leading
industries of the U.S. economy. The NASDAQ Composite Index is a
market-value weighted index of all common stocks listed on the NASDAQ
stock exchange. The Russell 2000 is a market-cap weighted index composed
of 2,000 U.S. small-cap common stocks. The Global Dow is an equally
weighted index of 150 widely traded blue-chip common stocks worldwide.
Market indices listed are unmanaged and are not available for direct
investment.
