For the first week of August, the stock market muddled along with investors generally showing a lack of enthusiasm to push prices up or down. Though financial stocks enjoyed a brief flurry of buying early in the week, even that fizzled out as inflation fears subsided. Except for Thursday, trading volume on the New York Stocks Exchange was below the daily average over the past year, an indication that investors are sitting on their hands for now.
Unless you have been traveling outside the U.S. lately, you may not have noticed that the U.S. dollar has been in decline since the start of the year. Weakness in the dollar has given a boost to foreign stocks so far this year, but that tide may be turning, at least for now. The U.S. dollar has recently found support at its two-year low and should attempt to rally, even if the dollar resumes its decline later this year.
Laif Meidell, CMT
We hope you have a great week,
Pat Meidell, Laif Meidell and Heidi Foster
Weekly Economic Update
LATEST JOBS REPORT BRINGS GOOD NEWS
U.S. payrolls swelled with 209,000 net new workers in July, according to the Department of Labor. That beat the 183,000 estimate by analysts surveyed by Reuters. About 53,000 of the hires were at restaurants and bars, with another 49,000 in the professional and business services category. While yearly wage growth remained at 2.5%, the headline jobless rate ticked back down to 4.3%. The U-6 rate (which includes the underemployed) stayed at 8.6%.1
A MEAGER GAIN IN CONSUMER SPENDING
The 0.1% June advance reported by the Department of Commerce matched the (low) expectations of economists surveyed by MarketWatch. Consumer incomes were flat in June; the same group of forecasters thought they would improve 0.3%. Personal spending had increased 0.2% in May, with income up 0.3%.2
ISM & PMI SHOW CONTINUED BUSINESS GROWTH
In June, both purchasing manager indices at the Institute for Supply Management were above 57. Their July readings were lower, but still indicated significant sector expansion as both numbers were well above 50. The manufacturing PMI fell 1.5 points to 56.3, and the service sector PMI dropped 3.5 points to a mark of 53.9.3
BLUE CHIPS TOP 22,000
In a mixed week for the major Wall Street indices, the Dow Jones Industrial Average seized the headlines. It reached a new milestone, thanks to its 5-day advance of 1.20%, settling Friday at 22,092.81. The S&P 500 finished the week at 2,476.83, adding 0.19%; the Nasdaq Composite fell 0.36% to settle at 6,351.56 Friday.4
Avis Budget Group, CBS, Marriott International, and Tyson Foods post earnings Monday. Andeavor, CVS Health, Dean Foods, Discovery Communications, GoDaddy, Green Dot, Hertz Global, Hostess Brands, Icahn Enterprises, Lions Gate, Michael Kors, Monster Beverage, Norwegian Cruise Line, Priceline, Ralph Lauren, Sunoco, TripAdvisor, Valeant Pharmaceuticals, Vivint Solar, and Walt Disney Co. present earnings news on Tuesday. Crocs, Kelly Services, Live Nation, Office Depot, Planet Fitness, Real Goods Solar, Starwood Hotels & Resorts, 21st Century Fox, Weibo, and Wendy’s offer earnings Wednesday. On Thursday, the July PPI and a new initial claims report arrive, plus earnings from Blue Apron, Brinker International, Camping World, Kohl’s, Macy’s, Nordstrom, Nvidia, and Snap. On Friday, the July CPI appears, and JC Penney reports Q2 results.