US Stocks Indexes Paused, Dipped After Record Runs

US Stocks Indexes Paused, Dipped After Record Runs

US Stocks Indexes Paused, Dipped After Record Runs


Stock indexes pulled back from record highs Thursday, as President Trump said he wants to impose tariffs on $200-B worth of Chinese goods next week.

President Trump has not made his final decision regarding this new round of tariffs on China, the largest yet.

On a related note, NAFTA negotiations continued in Washington, with the US and Mexico working to reach an agreement with Canada by Friday’s deadline.

Thursday,  10 of 11 S&P sectors finished in the Red.

The lightly-weighted materials sector (-1.3%) was the worst-performing group, but the financials (-0.8%), industrials (-0.8%), and consumer discretionary (-0.6%) spaces also showed notable weakness. The utilities sector (+0.1%) was the lone advancer.

Looking at other markets

US Treasuries advanced Thursday, sending yields lower across the curve, with the benchmark 10-yr T-Note yield dropping 2 bpts to 2.86%.

The US Dollar (.DXY) Index ticked up 0.2% to 94.62 and NYMEX WTI Crude Oil (USO) + 1.0% to 70.22 bbl.

Thursday’s economic data

  • Personal income climbed 0.3% in July (consensus +0.4%) following an unrevised increase of 0.4% in June
  • Personal spending rose 0.4% (consensus +0.4%) following an unrevised increase of 0.4%.
  • The PCE Price Index rose 0.1% in July, and the core PCE Price Index, which excludes food and energy, increased 0.2%  (consensus +0.2%).
    • The Key takeaway s (1) the spending increase puts Q-3 GDP on a solid growth track and (2) the Y-Y increase in the PCE Price Index (+2.3% Vs +2.2% prior) and the core PCE Price Index (+2.0% Vs+1.9% prior) will keep the Federal Reserve on its rate tightening track in September.
  • The latest weekly initial jobless claims count totaled 213,000, the consensus expected a reading of 214,000. Thursday’s tally was above the unrevised prior week count of 210,000. As for continuing claims, they declined to 1.708-M from a revised count of 1.728-M.
    • The Key takeaway from the report is the recognition that the 4-week moving average of 212,250 for initial claims is the lowest since 13 December 1969, underscoring the strength in the labor market.

Looking ahead

The Chicago PMI for August and the final reading for the University of Michigan Consumer Sentiment Index (MSI) for August will be released Friday.

Thursday, the major US stock market indexes finished at: DJIA -137.65 at 25986.92, NAS Comp -21.32 at 8088.39, S&P 500 -12.91 at 2900.87

Volume: Trade on the NYSE came in at 615-M/shares exchanged

  • NAS Comp +17.2% YTD
  • Russell 2000 +12.8% YTD
  • S&P 500 +8.5% YTD
  • DJIA +5.1% YTD

HeffX-LTN overall outlook for the major US stock market indexes is Bullish to very Bullish

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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