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In the Markets – Week-Ending September 23

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending September 23
Crystal Brook Advisors
We Make Financial Planning Crystal Clear

United States: Americans reduced home buying for the second straight month in August, suggesting the housing market might be stumbling due to a run-up in prices, an inventory shortage and persistent doubts about the economy’s strength.(1) Democratic presidential candidate Hillary Clinton would impose a 65% tax on the largest estates and make it harder for wealthy households to pass appreciated assets to their heirs without paying taxes.(2)

Europe: France’s economy contracted slightly in the second quarter, according to national statistics agency Insee.(3) Eurozone business activity this month expanded at its weakest rate since the start of 2015 as growth paths diverged but firms stopped cutting prices for the first time in a year. Markit’s Composite Flash PMI fell below expectations to 52.6 from August’s 52.9.(4)

Asia: Takata shares fell 12% in Tokyo as bidders for the company were said to consider the possibility of some form of bankruptcy proceedings for the air bag maker behind the auto industry’s biggest ever safety recall.(5) Japan’s central bank overhauled its stimulus program in an unexpected step, introducing an interest-rate target for 10-year government bonds to keep yields at current levels—near zero—to stoke inflation. The bank also left the door open to further monetary easing.(6)

Monday 09/19

• Violent attacks in three states have put the U.S. on high alert, but the incidents don’t appear to be shaking markets, with stock futures up 0.4%.(7)
• Lyft co-founder John Zimmer expects self-driving cars to handle the “majority” of LYFT’s rides within five years, all of them within 10 years, and foresees that private car ownership will “all-but end” in major U.S. cities by 2025.(8)

Tuesday 09/20

• U.S. stocks and government bond prices edged higher ahead of looming decisions from major central banks.(9)
• Chesapeake Energy tumbled 5% in extended trading after Carl Icahn reduced his stake in the company to 4.6% from 9.4%.(10)

Wednesday 09/21

• The Federal Reserve left short-term interest rates unchanged at its policy meeting ended Wednesday but said the case for an increase later this year has strengthened. During a press conference, Chairwoman Janet Yellen rejected charges the central bank is politically compromised.(11)
• Microsoft has announced plans to buy back up to $40B in stock and boost its dividend by 8% to $0.39, the latest in a series of moves by the software giant to share a steady flood of cash with shareholders.(12)

Thursday 09/22

• U.S. futures are heading higher after the Federal Reserve left rates unchanged and lowered its forecasts.(13)
• Danish conglomerate Moeller-Maersk said it is splitting its operations into two separate divisions focused on transport and energy, as it battles with the worst shipping downturn in years.(14)

Friday 09/23

• Yahoo disclosed a security breach by a “state-sponsored actor” affecting at least 500 million users, potentially the largest such breach on record and the latest hurdle for the company as it works through the sale of its core business.(15)
• Saudi Arabia has offered to lower its oil production if Iran agrees to cap output this year at its current level of 3.6M bpd.(16)
 

Market Close
U.S. stocks closed lower Friday, as a drop in oil prices dragged on energy shares, but finished the week higher, boosted by a lack of a rate hike from the Federal Reserve. The Dow Jones Industrial Average DJIA, -0.71% closed down 131.01 points, or 0.7%, at 18,261.45, for a weekly gain of 0.8%. Shares of Apple Inc. AAPL, -1.68% and Goldman Sachs Group Inc. GS, -1.65% led the blue-chip average lower. The S&P 500 index SPX, -0.57% finished down 12.49 points, or 0.6%, at 2,164.69, led lower by a 1.1% drag from the energy sector, as oil prices CLX, -0.02% settled down 4%. The Nasdaq Composite index COMP, -0.63% fell 33.78 points, or 0.6%, to close at 5,305.75. Both the S&P 500 and Nasdaq finished the week up 1.2%.(17)

Contributor: Oscar Xia

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