US Stock Markets Ended August 16, 2019

The S&P 500 finished a volatile week lower, driven by the yield curve briefly inverting for the two-year and ten-year Treasuries. The brief inversion was partially due to weak economic data out of China and Germany, leading investors to seek safe haven assets. Despite the continued trade-war rhetoric and more volatile markets, the consumer remains a bright spot with retail sales advancing by 0.7% versus expectations of only a 0.3% gain. On a sector basis, defensive areas such as consumer staples and utilities held up better for the week, while cyclical sectors were hurt by recession fears fueled by the yield curve inversion. The banking industry was one of the worst performing industries as an inverted yield curve reduces the profitability of loans made. With earnings season coming to a close, a couple last bellwethers reported results. Despite fresh tariffs on Chinese goods, Walmart Inc. jumped after increasing full-year guidance and reporting comparable-store-sales excluding gas of 2.8%. By contrast, shares of Cisco Systems Inc. fell by over 8% after announcing disappointing results on a weak outlook due to headwinds from the continued U.S.-China trade war and slower global growth. Myriad Genetics plummeted after reporting an earnings miss and an FDA inquiry into one of its key drugs. Sysco Inc. beat reduced expectations as international was a relative bright spot for the food distributor. Looking ahead, investors will be focused on next week's Fed meeting to gain clues into future interest rate cuts. Several retailers are also set to report earnings next week including Home Depot, TJX Companies and Gap Inc. With global economic growth slowing, changes in data points are likely to lead to swings in the market.
Posted on Monday, August 19, 2019 @ 8:09 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.