Stocks finished higher for the fifth-straight week, while bond prices were flat. Although Fed comments and more discussion of tax reform dominated the capital markets headlines, but there was little movement in the large indices.
After eight consecutive days of positive returns, U.S. equities closed slightly lower Friday and finished the week up 1.10 percent. Emerging markets, up 2.75 percent, extended the lead as the best performing asset class of 2017 with a total return greater than 30 percent.
Equities continue their grind harder and higher this week as optimism for economic growth remains. The S&P 500 finished the week up three quarters of a percent resulting in year-to-date gains of over 14 percent. Yields also ticked up resulting in the 10-year Treasury yielding 2.32 percent.
As the Western states struggle with wildfires and the Southeastern states get pounded by hurricanes, the stock market quietly made new highs. The S&P rallied this week 1.4 percent, closing in on the psychologically important 2,500. Conversely, bonds felt the swing into equities with rates on the 10-year U.S. Treasury rising 13 basis points to 2.20 percent.
The passing of Hurricane Harvey and the imminent landfall of Irma failed to rock the boat for equities, which remain near all-time highs despite puts and takes amid industries being impacted by severe weather events. More remarkable than trade posturing in home improvement and insurance stocks is the observation that benchmark interest rates and the dollar continue to slide.
Stock markets were higher this week, despite Hurricane Harvey and a weaker-than-expected jobs report. The S&P 500 was up 1.5 percent, ending the week close to the all-time high of 2,480 from early August. Bond yields slid slightly lower, with the benchmark 10-year Treasury yield dipping to 2.14 percent. August’s nonfarm payrolls report showed a gain of 156,000, which was below the expected 180,000 jobs.
For the week, the equity markets were down more than 1 percent as investors followed political events in Washington D.C. While the markets have been mostly focused on the global surge in earnings growth this year, political drama took center stage this week as there are concerns that the current administration will be unable to successfully enact tax reform and deregulation.
Headlines screaming, “fire and fury,” and “ballistic rockets are on constant standby,” could have surely warranted a multi-percentage sell-off. Fortunately, the market’s reaction was somewhat muted, falling just over 1 percent for the week. Historically, North Korean headlines have had minimal impact on the stock market. In 2006, when they detonated their first nuclear device, U.S. stocks were actually up.
The slow creep higher in the markets continued this week. The S&P 500 finished the week up 0.12 percent with financials stocks leading the way, up 2 percent. The ADP jobs report on Wednesday and the nonfarm payroll today gave us “not too hot, not too cold” readings.
Amid the busiest week of second quarter earnings reports, blue-chip stocks continued to trade near record levels. With nearly 40 percent of the S&P 500 companies having reported over the past five days, the clear plurality of results has exceeded expectations.
Equity markets sold off on Friday, but were mixed for the week. The S&P 500 closed out the week slightly higher, returning a positive .45 percent for the week. The Dow Jones Industrial Index ended the week about -.30 percent lower, with energy leading decliners. The Nasdaq returned a strong 1 percent for the week.
Led by a 3.8 percent gain in emerging markets, global equities sustained their upward march this week. The S&P 500 returned 1.4 percent and again flirts with an all-time high. 10-year U.S. Treasury yields fell seven basis points as soft inflation data weighed on expectations for future interest rate hikes. The Fed continues to grapple with conflicting signals in an attempt to balance the dual mandate of maximizing employment and stabilizing prices.
Despite improving economic data, the S&P 500 finished the week flat. Solid global PMI’s continue to move interest rates higher around the world. 10-year yields in Germany hit an 18-month high, and the 10-year U.S. Treasury finished the week at 2.39 percent. Just 11 days ago the benchmark U.S. rate was at 2.13 percent.