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Bob Carey
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  US Stock Markets Ended August 17, 2018
Posted Under: Weekly Market Commentary

 
Stocks oscillated between gains and losses before finishing higher for the week on strong earnings from a couple mega-cap stocks and improved sentiment over a potential trade deal with China.  U.S. and Chinese negotiators are working on a plan to have President Donald Trump and Chinese leader Xi Jinping meet in November, which could lead to the end of the current trade dispute. For the week, investors had to weigh fears of Turkey's economic crisis spreading to other emerging markets and trade concerns against continued strong economic data and earnings. In economic news, retail sales advanced by 0.5% for the month of July, beating expectations of a 0.1% increase. With earnings season nearly complete, Wal-Mart Inc. added to an already spectacular earnings season by topping estimates on strong comparable store sales of 4.5%, the largest increase in a decade, and 40% growth in e-commerce revenues. Shares of Cisco Systems Inc. jumped after reporting strong demand across the globe for its products. By contrast, Applied Materials Inc. shares sank after announcing disappointing guidance due to weak demand from foundry customers. Nvidia Corp. also saw its shares move lower as crypto-currency product sales declined to $18 million from $289 million in the previous quarter. Nordstrom Inc. raised full-year profit forecasts on strong demand from its anniversary sale, while Macy's Inc. disappointed investors due to higher-than-expected expenses. With 93% of members reporting, the S&P 500 has posted 24% earnings growth for the quarter. In addition, 81% of S&P 500 members have posted positive earnings surprises for the current quarter versus 72% for the second quarter 2017. While trade sentiment and contagion concerns will likely drive the market in the near term, strong domestic growth has the potential to keep U.S. markets moving higher over a longer horizon.
Posted on Monday, August 20, 2018 @ 8:07 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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