- New LPL Market Signals Podcast. In case you missed it, listen to Senior Market Strategist Ryan Detrick and Equity Strategist & Portfolio Manager Jeffrey Buchbinder discuss the S&P 500 Index’s 5-month win streak, recent economic reports, and emerging markets’ currency jitters. Please join our discussion on social via #LPLMarketSignals.
- Small business optimism at record high. The NFIB Small Business Optimism gauge rose to a record-high 108.8 last month. The percentage of surveyed firms that plan to increase capital expenditures rose to its highest level since 2007, while firms expecting to invest in inventory climbed to the highest level since 2005. Small business sentiment has gradually improved amid a $350 billion windfall from fiscal stimulus implemented earlier this year. Increased business spending could fuel strong economic growth through the end of this year as capital expenditures generally improve productivity, which boosts output.
- Watching trade headlines. Chinese stocks dropped for a second straight day, hitting their lowest level since January 2016 after the World Trade Organization announced that China has asked to implement an additional $8.4 billion in retaliatory trade measures against the U.S., in response to the U.S.’ failure to comply with anti-dumping measures. While the value of the proposed sanctions is modest, the move adds to worries that the U.S. and China won’t reach a trade resolution any time soon. Investors are also anticipating a $200 billion round of tariffs on Chinese imports (announced last month) to be implemented in the coming days, while President Trump hinted to an additional $267 billion in tariffs last week. If these tariffs are implemented along with those already in place, the amount of taxed imports would exceed the $506 billion in Chinese imports the U.S. received last year.
- Wage growth jumpstarts longer-term yields. On Friday, the 10-year Treasury yield jumped the most on a jobs report day since January 2017 after August data showed average hourly earnings grew at their fastest pace of the economic cycle. Accelerating wage growth has re-ignited inflation expectations, and as we’ll show later today on the LPL Research blog, it could be the catalyst for consistently higher long-term rates.
Monitoring the Week Ahead
- PPI Report (MoM, Aug)
- Federal Reserve’s Beige Book (Aug)
- Eurozone Industrial Production (Jul)
- Eurozone Employment Report (Q2)
- Japan PPI Report (Aug)
- CPI Report (MoM, Aug)
- Initial Jobless Claims (Sept. 8)
- China Unemployment Rate (Aug)
- China Retail Sales (Aug)
- China Industrial Production (Aug)
- Turkey Central Bank Meeting (Sep)
- Retail Sales (MoM, Aug)
- Import Price Indexes (MoM, Aug)
- Export Price Indexes (MoM, Aug)
- Industrial Production (MoM, Aug)
- Eurozone Trade Balance (Jul)
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Index data obtained via FactSet
For Public Use (Exp. 9/19)