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IN-THE-MARKETS

In the Markets – Week-Ending August 12

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending August 12
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: The longest stretch of productivity declines since the end of the 1970s is threatening to restrain U.S. worker pay and broader economic growth in the years ahead. (1) The amount of new money raised by exchange traded funds exposed to global stock markets has dropped 85 per cent in the first half of 2016, in a rare sign of pressure on the passive investment industry.(2)

Europe: British 10-year government yields have slid below 0.6% for the first time on record, while the pound dropped against the dollar, despite signs of post-referendum resilience in U.K. retail sales. (3) The Bank of England’s new bond-buying program ran into trouble on its second day of operations, as yield-hungry pension funds and insurers refused offers to sell gilts to the central bank. (4)

Asia: China’s exports and imports fell more than expected in July, making a rocky start for the third quarter and suggesting global demand remains weak in the aftermath of Britain’s decision to leave the EU.(5) Consumer inflation in China grew less rapidly in July as increases in food costs abated, giving authorities more room to ease monetary policy in the world’s second-largest economy. (6)

Monday 08/08

• Stocks and oil prices extended gains at the start of the week after Friday’s strong jobs report sent the S&P 500 and Nasdaq to record closing highs.(7)
• Wal-Mart inked a $3.3 billion deal to buy web retailer Jet.com, bringing in some outside help to jump-start growth at the retail giant’s e-commerce operations.(8)

Tuesday 08/09

• U.S. stocks rose as oil hovered around its two-week high.(9)
• Dutch human resources provider Randstad Holding has agreed to buy Monster Worldwide for about $429M and intends to finance the acquisition through existing credit facilities.(10)

Wednesday 08/10

• U.S. stocks fell, dragged down by energy shares as oil prices slumped.(11)
• Oil prices are trading lower on bearish news from the American Petroleum Institute, which reported a large surprise build of 2M barrels in crude stocks.(12)

Thursday 08/11

• The International Energy Agency has said from July through September, global production of crude oil will fall behind demand by almost one million barrels a day. (13)
• Looking to escape onerous pipeline contracts, Chesapeake Energy (NYSE:CHK) has agreed to give away its Barnett Shale holdings to First Reserve Corp.-backed Saddle Operating, exiting the birthplace of the shale revolution.(14)

Friday 08/12

• U.S. stocks edged lower, Treasury bonds strengthened and the dollar weakened Friday after disappointing data on July retail sales.(15)
• Sharp shares surged almost a fifth overnight after Chinese antitrust authorities approved Foxconn’s (OTC:FXCOF) $3.8B takeover of the struggling Japanese display maker.(16)

 

 

Market Close
U.S. stocks ended mostly lower Friday, but still eked out small weekly gains, as weakness in shares of mining and chemical companies, along with a rise in active oil rigs, blunted an advance in the energy sector and rising oil prices. Still the Nasdaq closed at an all-time high, one session after all three benchmarks posted record closes on the same day for the first time since 1999. The S&P 500 index ended down 1.8 points, or 0.1%, at 2,183.99, weighed by sharp declines in Alcoa Inc. and Nucor Corp. and Dow Chemical Co. , followed by a 0.4% loss in the telecom sector. Three of the index’s 10 sectors ended in positive territory, with energy leading the gains, up 0.6%. The Dow Jones Industrial Average lost 37.53 points, or 0.2%, to 18,575.9, pulled down by a 1.9% drop in DuPont and a 0.9% drop in IBM Corp. but buoyed by a 1.3% gain in Exxon Mobil Corp. . Meanwhile, the Nasdaq Composite Index ended up 4.5 points, or 0.1%, at 5,232.89, an all-time closing high.(17)

Contributor: Oscar Xia

Sources:
(1) Wall Street Journal, (2) Financial Times, (3) Seeking Alpha, (4) Seeking Alpha, (5) Seeking Alpha, (6) Seeking Alpha, (7) Wall Street Journal, (8) Wall Street Journal, (9) Wall Street Journal, (10) Seeking Alpha, (11) Wall Street Journal, (12) Seeking Alpha, (13) Wall Street Journal, (14) Seeking Alpha, (15) Wall Street Journal, (16) Seeking Alpha, (17) MarketWatch