The major U.S. indices lost ground this week, as the market appeared rattled by negative-sounding headlines related to trade and politics. The Dow Jones Industrial Average declined just 0.4%, but the S&P 500 (-1.0%), Nasdaq Composite (-2.0%), and Russell 2000 (-2.5%) posted sizable losses.
Over the weekend, attacks on Saudi Arabia's oil facilities disrupted 5.7 million barrels per day of production, approximately 5% of the world's daily output. Oil prices have spiked (+15%) as a result, with the administration authorizing the use of the Strategic Petroleum Reserve and hinting at possible military action. For investors, headlines such as these may naturally spark concern.
The stock market extended its winning streak to three weeks, with value-oriented sectors leading the market closer to all-time highs. The S&P 500 (+1.0%) climbed back above the 3,000 level while the Dow Jones (+1.6%) rose back above 27,000.
With the markets fluctuating on a day-to-day basis from headlines such as U.S.-China trade and Federal Reserve monetary policy, it's important to maintain perspective on the overall health of the U.S. economy.
The stock market rallied for the second straight week, supported by developments in trade, politics, and encouraging economic data. The S&P 500 (+1.8%), Nasdaq Composite (+1.8%), and Dow Jones Industrial Average (+1.5%) each increased at least 1.5%. The Russell 2000 (+0.7%) trailed its larger-cap peers.
The S&P 500 rose 2.8% this week, snapping a four-week losing streak as the market turned more optimistic on trade dealings with China. The Dow Jones Industrial Average increased 3.0%, the Nasdaq Composite increased 2.7%, and the Russell 2000 increased 2.4%.
Initial public offerings (IPOs) often attract initial public interest - especially when familiar brands become broadly available to investors for the first time.
Of the market and economic indicators that usually precede recessions, none receives quite the attention as the steepness of the yield curve. It's for this reason that markets reacted with uncertainty to last week's intra-day yield curve inversion - the first since 2007. What does this mean for long-term investors and what's different this time?
For investors who focus too much on day-to-day headlines, the fact that several market and economic concerns have become intertwined is a major challenge. The recent Fed rate cut was partly in response to U.S.-China trade talks.
As I write this blog, the markets are recovering somewhat from yesterday's steep losses. The Dow Jones dropped over 750 points (almost 3%) on Monday alone. Over the past seven days the Dow (and most U.S. indices) are off around -5% (not including today's recovery).
The stock market sold off this week with a bulk of its losses coming after threats of a 10% tariff rate on $300 billion of Chinese goods, effective September 1. The S&P 500 (-3.1%) and the Nasdaq Composite (-3.9%) pulled back considerably from last week's record highs, while the Dow Jones Industrial Average (-2.6%) and Russell 2000 (-2.9%) also had poor performances.
This week, the Fed is widely expected to lower interest rates for the first time since 2008. Given a decelerating global economy and mixed economic data in the U.S., along with macroeconomic risks such as U.S. - China trade talks, there are many factors affecting the Fed's rate decision.
The stock market finished the week higher with the S&P 500 (+1.7%) and Nasdaq Composite (+2.3%) setting new record highs in the process. Upbeat earnings results throughout the week, and an encouraging first look into second-quarter GDP, helped the stock market continue its upward trend.
September 27, 2019 Weekly Market Recap