Weekly Expert Perspectives PAS

Going Deeper Into Record Territory

After returning to record territory last Friday, the S&P 500 trekked even higher this week, adding 0.9% in total. The tech-heavy Nasdaq outperformed, adding 2.1%, and the Dow also advanced, tacking on 0.7%. Investors dealt with a flurry of trade-related headlines this week, especially in regards to NAFTA negotiations.

The U.S. and Mexico reached a bilateral trade deal on Monday, a headline that sent Wall Street to new all-time highs. Canada then entered the discussions to try to work out a deal with the United States, but the two sides weren't able to reach an agreement by President Trump's Friday deadline. However, the White House said late on Friday that talks will resume next week.

In other trade-related news, Wall Street registered its only loss of the week on Thursday following reports that President Trump wants to move forward with tariffs on $200 billion worth of Chinese goods as early as next week. In addition, the president said in a Bloomberg interview that the EU's offer to eliminate auto tariffs does not go far enough and compared the EU's trade policies to those of China.

Meanwhile, on the earnings front, investors once again received quarterly results from a number of retailers this week, including results from well-known companies like Dollar General (DG), Best Buy (BBY), lululemon athletica (LULU), Dollar Tree (DLTR), Ulta Beauty (ULTA), Tiffany & Co (TIF), and Burlington Stores (BURL).

The results came in mostly better-than-expected, but guidance was more mixed, leaving the SPDR S&P Retail ETF (XRT) with a modest weekly gain of 0.3%.

Away from earnings, Amazon (AMZN) climbed to new records and crossed the $2000 mark for the first time ever after Morgan Stanley raised its target price for the online retail giant to $2500 -- a new Street high. Meanwhile, Apple (AAPL) also hit new records, helped by investing legend Warren Buffett, who said he's recently bought more shares of the world's largest tech company.

Tesla (TSLA) also made headlines, moving lower after its CEO, Elon Musk, announced that he's abandoned plans to take the electric automaker private.

As for the sector standings, seven groups finished the week in the green and four groups finished in the red. The top-performing sectors were technology (+2.0%), consumer discretionary (+1.8%), and health care (+1.0%). Conversely, telecoms (-1.7%), consumer staples (-0.5%), and utilities (-0.6%) finished at the back of the pack.

Also of note, there were some important pieces of economic data released this week, including the second estimate of Q2 GDP (+4.2% actual vs +4.0% Briefing.com consensus) and the July reading of the core PCE Price Index (+0.2% actual vs +0.2% Briefing.com consensus), which is the Fed's preferred measure of inflation. Neither report elicited much of response from the stock market though.

With August now in the books, it still appears very likely that the Fed will raise rates at its September meeting, with the CME FedWatch Tool placing the chances at 98.4%.

To download the printable version, CLICK HERE.

S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Indices are unmanaged and one cannot invest directly in an index. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely-used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service oriented firms. Data and rates used were indicative of market conditions as of the date shown and compiled by briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. Past performance is not a guarantee of future results. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. Chicago Board Options Exchange Volatility Index (VIX) tracks the expected volatility in the S&P 500 Index over the next 30 days. A higher number indicates greater volatility.

Park Avenue Securities LLC (PAS) is an indirect, wholly-owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker/dealer offering competitive investment products, as well as a registered investment advisor offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC. Provided by Briefing.com

2018-65778 (Exp 11/18)

Top