Indices
- Dow 45,544, -87or-0.19%.
- Nasdaq 21,455,-42or-0.20%.
- S&P 6,460, -6 or-0.09%.
- MSCI EAFE 2721.09, -41.76or-0.15%.
- USD10Y 4.227%, -3.3bpor-0.77%.
- WTI Crude $64.01bbl, +$0.35or+0.55%.
Markets Churn Despite Drama
It all started first thing Monday when the President unloaded both barrels of the bully pulpit shotgun and announced he was firing Fed Governor Lisa Cook for alleged mortgage fraud (she refused to step down stating the President does not have the authority to relieve her from her duties) and then threatened China with 200% tariffs if Beijing were to restrict exports of rare earth magnets to the U.S. However, he was far from finished, as on Wednesday he announced a doubling of tariffs on Indian goods (excluding electronics and pharmaceuticals for now). On Friday, the U.S. Federal Appeals Court ruled that tariffs are the sole purview of Congress. Finally, over the weekend, the President characterized the U.S/Indian trade relationship as “a totally one-sided disaster” after Indian PM Modi visited China. Despite all the drama, the markets were relatively unchanged for the week.
On the earnings and economic front, Nvidia reported another very good quarter, beating Street estimates and raising forward guidance (NVDA traded down -1.7% for the week). The first revision of Q2 GDP increased to +3.3% vs the original +3.0% reading. Most importantly, the July headline Personal Consumption Expenditure (PCE) report was in line with expectations, and the headline year-over-year number was unchanged from last month at +2.6%. However, Core PCE, which strips out the more volatile food and energy prices, was in line with expectations but rose to +2.9% year-over-year. There are three more important data points prior to the next Fed meeting; this Friday’s Non-Farm jobs report, the September 10 Producer Price Index (PPI), and the September 11 Consumer Price Index (CPI).
The Upcoming Week: Sep 1 – Sep 5
Despite the short week, the economic calendar is jam packed with labor data; JOLTS on Wednesday, ADP Private Payrolls on Thursday and the 800lb gorilla, non-farm payrolls on Friday. Also on the calendar are the August data on the U.S. manufacturing and services sectors, the U.S. unemployment rate and an inflation data point in U.S. hourly wages.
Earnings are light this week, but the headliners can move markets; Salesforce (CRM) and Broadcom (BRCM).
Economic Calendar
Monday – Markets Closed in Observance of Labor Day. Earnings: N/A.
Tuesday – August Final U.S. Manufacturing PMI, ISM Manufacturing Survey. Earnings: N/A.
Wednesday – July Job Openings and Labor Turnover Survey (JOLTS). Earnings: Macy’s (M), Salesforce (CRM).
Thursday – Initial Jobless Claims, August ADP Private Payrolls. August Final S&P U.S. Services PMI, ISM Services Survey. Earnings: Broadcom (AVGO).
Friday – August Non-Farm Payrolls, Unemployment Rate, U.S. Hourly Wages. Earnings: N/A.
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Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets...Bitcoin, Ethereum, Solana, ACHR, BITB, HPE, ITIB, NVDA, and RIVN.