ND&S Weekly 9.30.19 – Economic Growth Slowing?

September 30, 2019

Major stock indexes declined for the second consecutive week as economic data indicated that consumer spending slowed and businesses pulled back on investment. Also, mixed signals on the U.S. – China trade dispute weighed on the financial markets. The S&P 500, DJIA and the NASDAQ declined 0.98%, 0.43% and 2.18%, respectively. U.S. consumer spending only edged up 0.1% after surging 0.5% in July and orders for core capital goods declined 0.2%. International markets were also negative with the MSCI EAFE down 0.62% and emerging markets down 1.86% as concerns over persistent weakness in global manufacturing continue. The best performing sectors last week were the more defensive ones of consumer staples, utilities and real estate.

U.S. Treasuries did well last week as headlines about the White House considering limits on U.S. corporate investment in China and House Democrats initiating an impeachment inquiry into President Trump’s involvement with Ukraine pushed risk-averse investors into the perceived safety of bonds. The yield on the 10 year U.S. Treasury  declined from 1.74% to 1.69%.

This week should be a busy week for economic data with reports on ISM mfg., factory orders, and ISM non-mfg. On Friday, the closely watched employment report which is estimated to be for 140,000 new jobs will be released.

“Success seems to be largely a matter of hanging on after others have let go.”William Feather