The Market Week in Review

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.

Quote

“Fear makes the wolf bigger than he is.”

     – German Proverb

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