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September 3, 2019 - Stocks Rally as August Ends

September 03, 2019
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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%.[i],[ii]

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.[iii]  

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.[iv],[v]

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.

 

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 Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. 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.

 


[i]https://www.wsj.com/market-data

 

[ii]https://quotes.wsj.com/index/XX/990300/historical-prices

 

[iii]https://www.marketwatch.com/story/dow-futures-up-over-250-points-as-china-tamps-down-fears-of-further-trade-war-escalation-2019-08-29

 

[iv]https://www.cnbc.com/2019/08/27/us-consumer-confidence-august-2019-index-dips.html

 

[v]http://www.sca.isr.umich.edu/