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Market Commentary – Thursday, August 10, 2018

landsberg bennettStocks finished mixed on Thursday. The Dow fell 74 points to 25509 while the S&P 500 declined 4 points to 2853. The Nasdaq Composite added 3 points to 7891, its first eight-day winning streak since October 2017.

The major averages traded in a narrow range as lingering geopolitical tensions outweighed generally positive corporate updates. This week, the Trump administration and China levied additional tit-for-tat tariffs on imports. On the data front, initial jobless claims unexpectedly declined to 213,000 in the prior week. A separate report showed core producer prices (ex-food and energy) rose 2.7% year-over-year, slightly below estimates of a 2.8% gain. A final update on wholesale inventories showed a 0.1% gain in June.

Energy shares were down the most amid growing concern the trade dispute could negatively impact future demand for oil. Financials also underperformed in conjunction with the flattening yield curve. Consumer Discretionary stocks outperformed as Viacom advanced 6.0% to $30.34 after topping earnings projections.  The Telecom and Tech groups also outperformed as CenturyLink surged 13.1% to $20.97 and Apple climbed 0.8% to $208.88. In other earnings news, Perrigo retreated 10.6% to $70.03 after the generic drug maker missed revenue projections and reduced its forward guidance.

Breadth was even on issues on the NYSE and positive on issues by 10:9 on the Nasdaq. Composite NYSE volume was more than 3.4 billion shares.

Treasuries strengthened as the yield on the benchmark 10-year note declined four basis points to 2.92%. In commodities, WTI crude declined 0.2% to $66.70 /barrel. COMEX gold slipped 0.1% to $1211.70/ounce amid a stronger dollar.

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