US Stock Markets Ended August 31, 2018

Stocks continued to grind higher for the third consecutive week as potential tariffs and trade deals remained in the headlines. Equities rose early in the week after President Donald Trump and Mexican President Enrique Peña Nieto announced a joint trade deal that is set to modify the current NAFTA deal. However, stocks lost ground in the latter half of the week as a trade deal with Canada has yet to materialize and $200 billion of new tariffs could be placed on Chinese goods as early as next week. In economic news, consumer spending increased by 0.4% in July, while incomes increased by 0.3%, missing expectations of a 0.4% increase. In stock news, shares of Advanced Micro Devices, Inc. added to recent gains after unveiling its new datacenter graphics card, which should help speed up rendering and virtualization for customers. Electronic Arts Inc. slipped after lowering full year guidance due to impacts from a strong dollar and a reduced outlook for its mobile games. The video game maker also announced a delay for the next Battlefield game by one month. With earnings season complete, Dollar Tree, Inc. and Dollar General Corp. reported mixed results versus solid earnings announcements by many large big-box retailers earlier in the quarter. Dollar stores are losing out to competitors with large e-commerce segments and better in-store experiences as consumers are not as price sensitive due to the strong economic backdrop. The S&P 500 posted 24% earnings growth for the quarter. In addition, 81% of S&P 500 members posted positive earnings surprises for the second quarter 2018 versus 72% for the second quarter 2017. Looking ahead to next week, investors will remain focused on any new trade deal developments with China and Canada. Additionally, August's job report, released Friday, will be a key barometer for the economy.
Posted on Tuesday, September 4, 2018 @ 8:08 AM

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.