What we think

IN-THE-MARKETS

In the Markets – Week-Ending August 5

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending August 5
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: Investment banks have cut their outlook for oil prices for the first time in four months, concerned about the continued oversupply in crude that has already sunk this year’s market rally.(1) Personal income rose 0.2 percent in June, following a 0.2 percent reading in May. Personal spending remained solid at 0.4 percent or 0.3 percent in real terms. Disposable personal income appears to be slowing.(2)

Europe: U.K. construction shrank the most since the financial crisis in July, with companies citing uncertainty related to Brexit for the continued weakness.(3) The Bank of England cut its benchmark interest rate to the lowest in its 322-year history and revived a financial crisis-era bond-buying program to cushion the U.K. economy from the aftershocks of the vote to leave the European Union.(4)

Asia: Looking to jolt the nation back to life, Japanese Prime Minister Shinzo Abe’s cabinet has approved a ¥28T ($274B) stimulus package amid a growing consensus that monetary policy alone won’t be able to revive the economy.(5) The Philippines is eager to join the Trans-Pacific Partnership and has already held informal talks with the U.S. to do so.(6)

Monday 08/01

• Uber Technologies is giving up its costly battle for China’s riders, swapping its local operations there for a minority stake in the country’s homegrown champion.(7)
• U.S. oil prices entered bear-market territory Monday, settling at $40.06 a barrel after dipping below $40, down 22% from the market’s June high. (8)

Tuesday 08/02

• The Dow Jones Industrial Average was on track for its longest losing streak in nearly a year, while oil prices hovered near $40 a barrel.(9)
• Credit Suisse and Deutsche Bank will be dropped from the Stoxx Europe 50 index (NYSEARCA:FEU) next Monday and replaced with ASML Holding (NASDAQ:ASML) and Vinci (OTCPK:VCISY).(10)

Wednesday 08/03

• Bitcoin plunges 20% after the exchange was hacked and $65 million worth of bitcoins was stolen.(11)
• Oil prices made their biggest gains in three weeks Wednesday with help from a surprisingly large draw on gasoline stocks and a bear-market rebound.(12)

Thursday 08/04

• U.S. stocks were little changed Thursday after the Bank of England surprised investors with an aggressive package of stimulus measures designed to revive the U.K. economy.(13)
• After six years of effort and about $30M in investments, space-exploration startup Moon Express has become the first commercial venture to get U.S. regulatory authorization for a mission beyond Earth’s orbit.(14)

Friday 08/05

• U.S. stocks, the dollar and Treasury yields all jumped after U.S. hiring in July topped forecasts, with the Nasdaq Composite Index surpassing its record close in intraday trade.(15)
• Mercedes-Benz is planning its own distinct line of electric vehicles, challenging BMW and Tesla in a bet that alternative fuel cars have the potential to become profitable.(16)
 

Market Close
The S&P 500 and the Nasdaq Composite Index climbed to record high close on Friday as a strong jobs report restored confidence in the U.S. economy. The U.S. created 255,000 new jobs in July, significantly better than the 185,000 growth forecast by economists in a MarketWatch survey. The S&P 500 SPX, +0.86% rose 18 points to close at 2,182 for a weekly gain of 0.4% while the Nasdaq COMP, +1.06% added 54 points, or 1.1%, to end at 5,221, up 1.1% this week. The Dow Jones Industrial Average DJIA, +1.04% gained 191 points, or 1%, to close at 18,543, advancing 0.6% for the week.(17)

Contributor: Oscar Xia

Sources:
(1) Source: Wall Street Journal, (2) Wells Fargo Economics Group, (3) Seeking Alpha, (4) Wall Street Journal, (5) Seeking Alpha, (6) Seeking Alpha, (7) Seeking Alpha, (8) Wall Street Journal, (9) Wall Street Journal, (10) Seeking Alpha, (11) New York Times, (12) Wall Street Journal, (13) Wall Street Journal, (14) Seeking Alpha, (15) Wall Street Journal, (16) Seeking Alpha, (17) MarketWatch