- New Market Signals podcast. In this week’s episode of the client-approved Market Signals podcast, Chief Investment Strategist John Lynch and Senior Market Strategist Ryan Detrick talk second-quarter earnings season, implications of the S&P 500 Index’s new record high, and dig into the minutes from the Federal Reserve’s latest monetary policy meeting. Access it here.
- NAFTA deal with Mexico fuels another record high. President Trump announced an agreement with Mexico over automobile trade rules yesterday in a deal that would replace NAFTA. The positive trade development fueled the S&P 500 Index’s second consecutive rally to record highs after a nearly 7-month drought without a record close. The S&P 500’s 0.7% gain yesterday was also the sixth-largest increase after a record high in the current bull market (out of 204 record closes), which is an encouraging sign of market strength at these levels.
- Merchandise trade deficit widens the most since 2015. Preliminary data for July showed the U.S. merchandise trade deficit widened to $72.2B, its biggest month-over-month increase since March 2015. Last month’s growth in the trade deficit was driven by a sharp decline in exports, reflecting the impact of imposed tariffs over the past few months. Exports were one of the main contributors to second-quarter economic growth, accounting for 1.1% of the 4.1% expansion in gross domestic product as purchasers rushed to beat tariff implementation at the beginning of July.
- Record short position in 10-year Treasury futures. The net short position among non-hedging investors (i.e. those speculating on the direction of rates) in 10-year Treasury futures has increased to its biggest size on record, indicating these investors are overwhelmingly positioned to profit if interest rates rise. Today on the LPL Research blog, we examine how this massive short position could influence the future path of the 10-year yield, especially if rates fall meaningfully below 2.8%, a support level for yields over the last six months.
- Personal Income (Jul)
- Personal Spending (Jul)
- Germany: CPI (Aug)
- Eurozone: Consumer Confidence (Aug)
- Japan: Jobless Rate (Jul)
- Japan: Tokyo CPI (Aug)
- Japan: Industrial Production (Jul)
- China: Mfg. & Non-Mfg. PMI (Aug)
- Chicago PMI (Aug)
- France: CPI (Aug)
- Eurozone: Unemployment Rate (Jul)
- Eurozone: CPI (Aug)
- Italy: CPI (Aug)
- Italy: GDP (Q2)
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Index data obtained via FactSet
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