Weekly Market Commentary, August 7, 2018

August 7, 2018  | By Robare & Jones

The Markets

U.S. stocks rallied, while global markets lagged. The S&P 500 rose 0.8 percent. Global stocks slipped as the MSCI ACWI fell 0.2 percent. The Bloomberg BarCap Aggregate Bond Index rose 0.1 percent.

July’s performance was very positive. The S&P 500 rose 3.6 percent, and global stocks climbed 2.9 percent. Value stocks performed very well, too, after lagging growth in recent years. The Russell 1000 Value Index rose 4 percent, while the Russell 1000 Growth Index rose 2.9 percent. The aggregate bond index produced flat returns in July.

 

Data as of 08/03/2018 1-week YTD 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.8% 6.2% 14.9% 10.6% 10.7% 8.6%
Dow Jones Global ex-U.S. -1.4 -4.1 2.0 3.7 3.0 1.2
10-year Treasury Note (Yield Only) 3.0 NA 2.2 2.2 2.6 4.0
Gold (per ounce) -0.6 -6.2 -4.1 3.7 -1.4 3.0
Bloomberg Commodity Index 0.1 -3.7 1.9 -2.1 -7.5 -8.1
DJ Equity All REIT Total Return Index 3.2 3.2 6.2 8.0 9.4 8.3

S&P 500, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Download Market Data Table

 

Economics

The U.S. jobs market remains robust. The July jobs report released last week showed 157,000 jobs created, missing the 190,000 estimate. The report pushed unemployment down to 3.9 percent, which many consider to be full employment by historical standards. The rate considered most important is annual wage growth, which ticked up a little higher to 2.7 percent. Wage growth had been inching higher reflecting the overall strength of the economy. Some reports suggested layoffs at Toys R Us, which is shutting down, caused the overall number to miss targets. Previous months’ reports were increased and more than offset the lower-than-expected increase in July.

 

Fundamentals

Apple hit a milestone that no other company in history has ever reached before: $1 trillion in market value. This occurred after its strong second quarter earnings report pushed the stock up 2.92 percent. This feat illustrates the change in corporate landscape from industrials toward technology. Incidentally, the first company to hit $1 billion in market-cap was U.S. Steel.

 

Fun Story

America has a billion-dollar drunk shopping problem

Companies like Amazon have made online purchasing so simple that consumers can click and buy anytime and anywhere. However, this has led to a drinking-and-buying problem. The United States, on average, spends $448 per person on drunk purchases. This totals more than $1 billion per year! Unfortunately, this problem can’t be blamed on millennials. Generation X spent the most per person at $738, while millennials spent $206.