How is your portfolio handling the up and down market of 2018?
August and September are the 2 most volatile months in the market.
Markets: It was an up week for the market, as investors took heart earlier in the week from the possibility of further trade talks between the US and China, but the market ended the day nearly flat on Friday, with the US readying more tariffs vs. China. The NASDAQ led the way this week, with Tech stocks getting a bounce.
“China said on Thursday that it welcomed an invitation by the United States to hold a new round of trade talks, as Washington prepares to further escalate the U.S.-China trade war with tariffs on $200 billion worth of Chinese goods. More than 60% of U.S. companies polled said the U.S. tariffs were already affecting their business operations, while a similar percentage said Chinese duties on U.S. goods were having an impact on business.”
High Dividend Stocks Going Ex-Dividend Next Week: Turkcell Iletisim Hizmetleri AS (NYSE:TKC), Vector Group Ltd (NYSE:VGR), Fs Investmt (NYSE:FSIC), Gladstone Investment Corporation (NASDAQ:GAIN), Gladstone Capital Corporation (NASDAQ:GLAD), Gladstone Commercial Corporation (NASDAQ:GOOD), Tupperware Brands Corporation (NYSE:TUP), Capitala Finance Corp (NASDAQ:CPTA), Solar Capital Ltd (NASDAQ:SLRC).
Volatility: The VIX fell 6% this week, ending the week at $12.07.
Currency: The $ fell vs most major currencies this week, except the Yen.
Market Breadth: 20 of the DOW 30 stocks rose this week, vs. 17 last week. 70% of the S&P 500 rose this week, vs. 60% last week.
Economic News:
“The U.S. budget deficit in August was $211 billion, nearly double the gap during the year-ago month, the CBO estimates. Excluding timing shifts, outlays grew 8%, as the net interest on public debt jumped 25%, defense spending jumped 10%, outlays for Social Security grew 5%, and outlays for Medicare benefits rose 7%. There also was an Agriculture Department downward adjustment made in the year-ago August. One boost to government finances was an increase in spectrum payments to the Federal Communications Commission.
Receipts fell by 3%, with corporate taxes dropping by $5 billion, while revenue from income and payroll taxes rose marginally. The budget deficit is widening in a big way. In the first 11 months of the fiscal year, the deficit was $895 billion, which is $222 billion more than the previous year. Outlays have climbed 7% while revenue rose 1%.
Corporate taxes have plummeted by 30% this fiscal year, both because of the lower rate as well as the expanded ability to immediately deduct the full value of equipment purchases. Individual income and payroll taxes have climbed 4%.
Spending on Social Security and Medicare have climbed 4% as more baby boomers retire, outlays on net interest on the debt have jumped 19% in part due to a higher rate of inflation triggering more payments to inflation-protected securities holders, and defense spending has jumped 6%. (MarketWatch)
“U.S. consumer prices rose less than expected in August as increases in gasoline and rents were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing. Excluding the volatile food and energy components, the CPI edged up 0.1 percent. The so-called core CPI had increased by 0.2 percent for three straight months. In the 12 months through August, the core CPI increased 2.2 percent after rising 2.4 percent in July.”
Week Ahead Highlights: There will be 4 Housing-related reports due out next week. The Fed meets the following week, and will most likely raise its rate. There will also be an OPEC meeting in the last week of September.
Next Week’s US Economic Reports:
Sectors: Energy, Tech, and Telecoms led this week, while the Financial sector lagged.
Futures:
Crude Oil WTI Futures prices settled higher on Friday to register a gain of about 1.8% for the week. Natural Gas Futures fell .25%% for the week.
