Broad markets rose higher again but with notable differences from the week prior. Is there a shift in sentiment as earnings season ends?
Monday
S&P 500 0.25% | NASDAQ 0.30%
Equity markets continued to digest data with mixed emotions. A short-term treasury auction indicated a move to safety as yields lowered.
Tuesday
S&P 500 1.13% | NASDAQ 1.39%
Inflation data was released on Tuesday with headline inflation coming in at and slightly below forecasts. Prices have not quite heated up and July’s data boosted optimism towards equities.
Wednesday
S&P 500 0.32% | NASDAQ 0.14%
Mortgage applications jumped as the 10- year Treasury yields fell. Consumer debt is skyrocketing with the recent unpausing on payments to student loans. A boost in mortgage applications suggests strength in earned income for U.S. Households.
Thursday
S&P 500 0.03% | NASDAQ 0.01%
Producer Prices came in much higher than expected but equity markets held steady on the day. The argument could be made that the data on prices could be due to the impacts of tariff policy. Markets appear to be taking a “wait-and-see” approach.
Friday
S&P 500 0.29% | NASDAQ 0.40%
The week concluded with consumer sentiment falling in August; however, the data does not signal a contraction at this time. Healthcare stocks came out on top with big advances.
Conclusion
S&P 500 0.94% | NASDAQ 0.81%
Markets kept inching higher this week as records were set for the S&P500 and Nasdaq on Wednesday. Discussions were had between the U.S. and Russia which was on the periphery as trading closed out the week. There was a rotation from sectors that have led the year (technology, utilities) into those in hibernation (consumer discretionary, healthcare). The rotation is not unusual as markets continue to reach record levels. Sectors that have been exceeding normal price-to-earning ratios by historical standards sold this week. A migration to defensive stocks could indicate that growth stocks may be peaking after the earnings’ season dust settles. Markets are still moving forward but there could be a lane shift as investors get out of the fast lane.
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