The U.S. stock market ended the week higher as the U.S. and China agreed to renew trade talks. Interest rates also moved higher with the 10-year treasury yield rising from 1.50% last week to 1.55% today. The spread between the 10-year treasury yield and the 2-year treasury yield widened slightly from 0.00% to 0.02%. The price of gold fell 1.03% to $1,515 an ounce amid optimism surrounding U.S. and China trade talks. The price of crude oil jumped 2.8% to $56.61 a barrel, boosted by positive news from China’s services sector. (China is the world’s second largest consumer of oil and world’s largest importer.)
This Week's Economic Highlights
- The ISM manufacturing index fell to 49.1% in August, marking the first below 50.0% reading since January of 2016. Any reading below 50.0% indicates contracting manufacturing activity.
- The U.S. trade deficit fell by 2.7% in July to a total of $54 billion. More specifically, U.S. exports rose by 0.6% to $207.4 billion while imports fell by 0.1% to $261.4 billion. The trade deficit between the U.S. and China fell by 1.98% to $29.6 billion. Despite the drop in the trade deficit, the overall gap is still large and growing amid the trade war between the U.S. and China.
- Initial unemployment claims rose by a slight 1,000 to 217,000 for the week ending August 31st. However, the more stable four-week average of initial claims rose by 1,500 to 216,250. Continuing unemployment claims, which lag initial claims by a week, fell by 39,000 to 1.66 million.
- The U.S. added 130,000 jobs in August, its smallest increase in three months. Meanwhile the unemployment rate holds steady at a near historic low of 3.7%. Wage growth rose by 0.4% in August and a strong 3.2% over the past year.
“Fear makes the wolf bigger than he is.”
– German Proverb
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