The Markets (as of market close August 31, 2018)
Trade concerns pushed stocks lower at the end of the week, wiping out some early-week gains. Canada and the United States haven’t yet come up with a trade agreement, and a major U.S. auto manufacturer changed its plans to import a car made in China due to increased tariffs. Nevertheless, each of the major indexes gained ground on their respective prior week’s value. The Nasdaq led the way for the week and continues to enjoy the largest yearly gain through 2018. The S&P 500 and Dow posted solid gains, while the small-cap stocks of the Russell 2000 pushed that index higher. Only the Global Dow recorded a very modest gain of less than .20%.
LAST WEEK’S ECONOMIC HEADLINES
- With more economic source data from which to draw, the second release of the gross domestic product for the second quarter showed the economy grew at an annual rate of 4.2%. Tax cuts and strong growth pushed corporate profits higher, climbing 3.3% in the second quarter and 7.7% over the past year.
- Job security and confidence in the economy may have pushed consumers to spend more than they made in July. According to the latest information from the Bureau of Economic Analysis, July saw pre- and after-tax personal income rise and consumer spending advance.
- The goods trade deficit expanded in July.
EYE ON THE WEEK AHEAD
The international trade deficit for goods and services expanded at a rate of 7.3% in June as imports increased while exports receded. The July report is out this week and is expected to show decreasing exports and increasing imports — resulting in a larger trade deficit. The August report on employment is also out this week. Last month saw 157,000 new jobs added with an unemployment rate hovering around 3.9%.
Have a great week!