Week in Review with Maureen Kelliher
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Maureen Kelliher

Each week, Investment Officer and resident economist Maureen Kelliher comments on investment trends and economic news which impact the financial markets.

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Capital Market Implications for the Week of August 27 - 31, 2018

The government’s second estimate of 2nd-quarter GDP was released last week and at 4.2% it was slightly better than the initial report. Although personal consumption for the quarter was revised down, it was still a healthy 3.8% and it was encouraging to note that several inflation gauges remained unchanged. After a strong June, pending home sales fell in July suggesting the recent housing softness will continue. On the other hand, personal incomes and real personal spending improved in July. Finally, manufacturing activity in August came in much stronger than anticipated. The ISM Index increased to 61.3 and new orders climbed to 65.1. It’s possible that industrial activity spiked due to the threat of trade tariffs, but the current level of activity, a 14-year high, is impressive nonetheless.

With the U.S. and Mexico agreeing on potential changes to NAFTA last week, markets both at home and abroad rallied on hopes of easing trade frictions. For the week, the Dow Jones Industrial Average rose 0.8%, the S&P 500 Index gained 1.0% and the NASDAQ reached a new high mid-week. Retailers and technology companies were the week’s best performers, having gained 2.0%, while telecoms lagged, off -1.6%. International stocks, as represented by the MSCI EAFE Index, increased 0.3% and emerging markets climbed 0.7%. As the long Labor Day weekend traditionally marks the end of summer, the bond pits were quiet last week. As such, the Barclays U.S. Aggregate Bond Index fell slightly along with U.S. corporates while ten-year municipal bonds and high yield bonds were relatively unchanged for the week.

Week in Review

 

 

 

Securities and other investment products are:

Wealth Management Disclosure

 

Weekly Macro Updates

 

  • Initial Jobless Claims (Aug 25) 212k est., 213k actual, 210k prior
  • Continuing Claims (Aug 18) 1725k est., 1708k actual, 1728k prior
  • GDP Annualizes QoQ (2Q S) 4.0% est., 4.2% actual, 4.1% prior
  • Personal Consumption (2Q S) 3.9% est., 3.8% actual, 4.0% prior: R-
  • GDP Price Index (2Q S) 3.0% est., 3.0% actual, 3.0% prior
  • Core PCE QoQ (2Q S) 2.0% est., 2.0% actual, 2.0% prior
  • Pending Home Sales MoM (Jul) 0.3% est., -0.7% actual, 1.0% prior: R+
  • Pending Home Sales NSA YoY (Jul) -2.5% est., -0.5% actual, -4.0% prior: R-
  • Personal Income (Jul) 0.4% est., 0.3% actual, 0.4% prior
  • Real Personal Spending (Jul) 0.2% est., 0.2% actual, 0.3% prior
  • PCE Deflator YoY (Jul) 2.3% est., 2.3% actual, 2.2% prior
  • Chicago Purchasing Manager (Aug) 63.0 est., 63.6 actual, 65.5 prior
  • ISM Manufacturing (Aug) 57.6 et., 61.3 actual, 58.1 prior
  • ISM New Orders (Aug) 65.1 actual, 60.2 prior
  • Strong or Improving
  • Inconclusive or lacking trend
  • Weak or declining

R+ Revised up
R- Revised down

Contact Us

In Massachusetts, please call:

Peter Cowan

617-441-1484

Marc Gearin

617-503-5268

Scott McGill

617-503-5246

Sara Cohn Sarkis

617-441-1570

William Yates

617-503-4041

In New Hampshire, please call:
Susan Martore-Baker

603-369-5101

Kaitlyn Gallagher

603-369-5111