Rover's Weekly Market Brief - 9/18/2020

Printer Friendly Printer Friendly September 18, 2020

Indices

DJIA: 27,657.40 (-0.03%)

NASDAQ: 10,793.00 (-0.56%)

S&P 500: 3,319.47 (-0.64%)

Commodities

Gold: 1,957.50 (+0.93%)

Copper: 310.65 (+2.20%)

Crude Oil: 41.14 (+10.21%)

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Economy

Industrial production rose for the fourth consecutive month, but gains slowed from +6.1% in June and +3.5% in July to +0.4% in August, and output was down -7.7% compared to August 2019. Manufacturing was up +1.0% (-6.9% Y/Y), and, as with the headline numbers, slowed from +7.5% and +3.9% gains in June and July, respectively. Tropical Storm Marco and Hurricane Laura caused temporary sharp drops in oil and gas production, and pushed mining output down -2.5% (-17.9% Y/Y) after gains in the two previous months. Overall capacity utilization edged up from 71.1% in July to 71.4% in August, with manufacturing utilization up +0.7% to 70.2%, while utilization fell for mining (-1.7% to 74.5%) and utilities (-0.5% to 74.5%).

Retail sales were up +0.6% to $537.5 billion in August, gaining +2.6% for the year. Motor vehicle sales slowed from +6.3% in July to +0.2%, but remained up +4.5% for the year. Similarly, nonstore (e.g. online) retailers slowed from +23.4% growth in July to 0.0% in August, but remained +22.4% up for the year. Sales grew for restaurants (+4.7%), clothing stores (+2.9%), electronics stores (+0.8%), and gas stations (+0.4%) but each of these businesses were down compared to the previous year. Although sales were down -16.9% for the year for department stores, the larger general merchandise stores group was up +0.8%.

The Federal Reserve noted that disruptions from the coronavirus outbreak weighed heavily on the economy in the near term and posed a considerable risk to the medium term economic outlook. In light of the current economic situation, the FOMC said that it would keep the federal funds rate at 0 to 1/4 percent until it was confident the economy was on track to reach its “maximum employment and price stability goals”. Updated economic projections continued to maintain a 0 to 1/4 percent rate through 2023, but softened the 2020 GDP drop from June’s -6.5% to -3.7%, and lowered GDP growth projections to 4.0% in 2021, 3.0% in 2020, with longer run growth expected at 1.9%. Unemployment rate projections were similarly softened to 7.6% for 2020, 5.5% for 2021, and 4.6% for 2022.

Upcoming Economic Reports:

Tuesday September 22 – Existing Home Sales

Friday September 25 – Durable Goods Orders

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
Tuscan
Hldgs
(THCB)
Nike
(NKE)
General
Mills
(GIS)
Costco
Wholesale
(COST)
Enochian
BioSciences
(ENOB)
OncoSec
Medical
(ONCS)
AutoZone
(AZO)
Cintas
(CTAS)
CarMax
(KMX)
Allied
Healthcare Prods
(AHPI)



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