Market Update: Wednesday, September 13, 2017

MarketUpdate_header

Yesterday’s Market Activity

  • U.S. gains continued amid void of fresh drivers; S&P 500 Index (+0.3%) posted its second record close this week. Dow +0.3%, Nasdaq +0.3%.
  • Volume near average on NYSE with advancers outpacing decliners 1.7:1.
  • Financials sector’s run continued along with rising rates; though rates dragged on real estate, utilities stocks.
  • Treasury yields up again as prices fell across the curve; 10-year note +4 basis points (0.04%) to 2.17%.
  • Commodities – WTI crude oil (+0.4%) to $48.28/bbl.; COMEX gold little changed near $1336/oz.; industrial metals lower, copper down ~2%.

Overnight & This Morning

  • Asian markets mixed overnight; some strength from Nikkei (+0.5%), but modest weakness elsewhere.
  • Major European indexes little changed mid-day, STOXX Europe 600 -0.1%.
  • Oil (+1.0%) is pushing higher to $48.70/bbl. after International Energy Agency optimistic on 2017 demand; Energy Information Agency oil inventory data due out later today.
  • Industrial metals sharply underperforming precious; copper -1.8%, gold +0.1%.
  • U.S. stocks open near flat as market pauses its nearly 3% rally off of August 18 low, with the Federal Reserve (Fed) meeting a week from today and a pick-up in news flow around tax reform in focus.

MacroView_header

Macro Notes

  • The Job Openings and Labor Turnover Survey (JOLTS) report for July, released on Tuesday, was largely unchanged from the previous month, but did show job openings at an all-time high, and the hirings-to-openings ratio trending lower, indicating increasing competition for qualified workers. A strong labor market has not yet created meaningful wage pressure, but the potential for a pick-up in wage pressure and its impact on inflation is something the Fed will continue to monitor closely.
  • Producer inflation came in weaker than expected, rising 0.2% in August versus expectations of +0.3%, after falling 0.1% in July. The Producer Price Index emphasizes wholesale prices and includes unfinished projects and reflects price changes sellers experience. The Consumer Price Index for August will be released tomorrow morning.
  • What happens when you miss the worst 10 days of the year? Did you know that if you avoided the 10 worst days of each year going back to 1990, you’d be higher every single year with an average annual return of nearly 40%? Or if you missed the 10 best days of the year over the same timeframe that you’d be down nearly 14% a year on average? Given the average annual return over this timeframe is nearly 9%, those are some big swings in each direction. Today on the LPL Research blog we will take a closer look at this always popular study.

MonitoringWeek_header

Click Here for our detailed Weekly Economic Calendar

Wednesday

  • MBA Mortgage Applications (Sept 8)
  • PPI (Aug)
  • Monthly Budget Statement (Aug)
  • Germany: CPI (Aug)
  • UK: Jobless Claims (Aug)
  • UK: Unemployment Rate (July)
  • Eurozone: Industrial Production (July)
  • Eurozone: Employment (Q2)
  • Sweden: GDP (Q2)
  • Japan: Bloomberg Japan Economic Survey (Sept)
  • China: Retail Sales (Aug)
  • China: Industrial Production (Aug)

Thursday

  • France: CPI (Aug)
  • UK: Retail Sales (Aug)
  • Bank of England: Bank Rate
  • Bank of England: Asset Purchase Target (Sept)
  • Eurozone: Weidmann
  • BOJ: Outright Bond Purchase
  • Japan: Industrial Production and Capacity Utilization (July)
  • China: Foreign Direct Investment (Aug)

Friday

  • Empire State Manufacturing Index (Sept)
  • Retail Sales (Aug)
  • Industrial Production and Capacity Utilization (Aug)
  • of Mich. Sentiment (Sept)
  • Business Inventories (July)
  • Eurozone: Trade Balance (July)
  • Eurozone: Labor Costs (Q2)
  • ECB: Nuoy
  • Bank of Russia: Key Rate

Saturday

  • China: New Loan Growth and Money Supply (Aug)

Important Disclosures

Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

Stock investing involves risk including loss of principal.

Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.

Treasury Inflation-Protected Securities (TIPS) are subject to interest rate risk and opportunity risk. If interest rates rise, the value of your bond on the secondary market will likely fall. In periods of no or low inflation, other investments, including other Treasury bonds, may perform better.

Bank loans are loans issued by below investment-grade companies for short-term funding purposes with higher yield than short-term debt and involve risk.

Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.

Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards.

High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors.

Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply.

Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit

Securities and Advisory services offered through LPL Financial LLC, a Registered Investment Advisor

Member FINRA/SIPC

Tracking #1-643777