August 28th – Weekly Update

  • U.S. equities bumped up as politics, once again, consumed headlines during the week. The S&P 500, Dow Jones and Nasdaq each finished higher; oil dipped; and gold gained some ground. The 10-year U.S. Treasury yield closed at approximately 2.17%.
  • During a rally in Phoenix, President Trump announced to the crowd that he would let the government shut down if Congress did not agree to fund a border wall with Mexico. He further stated that the U.S. would “probably” end up terminating the North American Free Trade Agreement (NAFTA).
  • The Kansas City Federal Reserve’s annual Jackson Hole Economic Policy Symposium was largely a non-event for investors. Neither Fed Chair Janet Yellen nor European Central Bank (ECB) President Mario Draghi touched on monetary policy in their respective speeches. Fedspeak surrounding the conference fit with expectations for a September balance sheet normalization announcement and a continued debate about a December rate hike.
  • Markit’s flash manufacturing Purchasing Managers’ Index (PMI) missed expectations, coming in at 52.5 versus the 53.5 consensus. The flash services PMI beat expectations, coming in at 56.9 versus the 54.9 consensus. Markit said in the release that, “the acceleration signaled for the economy as a whole suggests that GDP growth is still gaining momentum during Q3.”
  • July new-home sales fell 9.4% to 571K, below the 613K consensus estimate. This came after June was revised higher to 630K from 610K. On a year-to-year basis, home sales were down 8.9%.
  • Existing home sales for July missed expectations, falling 1.8% month-to-month to a 5.4M pace versus consensus for a 5.6M seasonally adjusted annual rate (SAAR). This was the slowest monthly pace of 2017, and represented a year- overyear rise of 2.1%. The median sales price was up 6.2% year-to-year to $258,300. July’s inventory fell 1% to 1.9M homes, some 9% lower than a year ago. The National Association of Realtor’s chief economist said the second half of 2017 has gotten off to a somewhat slow start, with the negative effects of low inventories and high prices acting as headwinds to would-be buyers. First-time buyers accounted for 33% of sales, up from 32% in June and a year ago.

CPWM Weekly Market Monitor (2017.08.28)