253.34 +0.13 (0.05%)
After hours: 6:18PM EDT
|Bid||0.00 x 1000|
|Ask||0.00 x 1000|
|Day's Range||252.23 - 253.55|
|52 Week Range||215.73 - 265.93|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.15%|
The stock market has rallied in recent months despite a growing list of negatives that include tariffs, trade tensions, rising interest rates and valuations that are still high by historical standards. Jack Ablin, co-founder and chief investment officer (CIO) of Cresset Wealth Advisors sees the market breaking out to new record highs, based on five indicators, per an interview with CNBC.
On August 13, US crude oil September futures fell 0.6% and settled at $67.2 per barrel. On the same day, the Energy Select Sector SPDR ETF (XLE) fell 1.3%. The fall in energy stocks might have contributed to the 0.4% and 0.5% fall in the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA), respectively, on August 13. Read Did Oil’s Fall Impact the S&P 500 Index? to learn more.
In the previous part of this series, we looked at some of President Donald Trump’s successful economic policies. Companies such as Ford (F) and Coca-Cola (KO) have seen higher input costs since US steel and physical aluminum premiums have risen following President Trump’s tariffs. The Trump administration has also been hot and cold on actions against Russia.
Judging by recent Wall Street commentary, investors are starting to notice liquidity again, meaning they’re noticing the lack of it. The most noticeable sign came earlier in the year with volatility spiking following the stock market plunge in late January. Although the subsequent rebound makes the selloff look like a mere correction, investors should heed it as a warning sign that liquidity is drying up amid Federal Reserve monetary tightening and other global central banks becoming less accommodative, literally cutting off the supply of fresh capital, according to Business Insider.
On August 3–10, US equity indexes reported small declines. Last week, the Dow Jones Industrial Average (DIA) fell 0.6%, while the S&P 500 Index (SPY) and the S&P Mid-Cap 400 ETF (IVOO) each fell 0.2%.
On August 3–10, US crude oil September futures price fell 1.3% and closed at $67.63 per barrel on August 10—the ninth consecutive close below $70.
The US consumer price index (or CPI) for July rose 0.2% sequentially and 2.9% over the last 12 months. The core CPI, which excludes the volatile food and energy components, rose by 2.4% in the 12 months to July, which was the largest increase in core CPI since September 2008. In June, core CPI rose by 2.3%.
While the U.S. economy remains relatively strong, concerns about Turkey and other emerging markets could be a drag on the major U.S. indexes this week.
Between August 2 and August 9, US equity indexes had the following correlation readings with September US crude oil futures follow: the Dow Jones Industrial Average (DIA): 40.1% the S&P 500’s (SPY): 44.1% the S&P Mid-Cap 400’s (IVOO): 80.5%
On August 9, September US crude oil futures fell 0.2% and settled at $66.81 per barrel—the lowest closing level for active US crude oil futures since June 21. On the same day, oil-weighted stocks Hess Corporation (HES), Occidental Petroleum Corporation (OXY), and Apache Corporation (APA) fell 2.9%, 4.2%, and 6.2%, respectively—the underperformers on our list.
A currency crisis is currently rattling the world markets. Today, the Turkish lira (TUR) has plunged 20% against the US dollar (UUP), bringing its YTD (year-to-date) fall to 42%. The markets fear that this will spread to other regions, especially emerging markets (EEM).
As we noted previously, copper miners including Freeport-McMoRan (FCX), Glencore (GLEN-L), and Southern Copper (SCCO) have fallen this year. The fall in copper miners’ stock prices has been led by weak copper prices. Although copper started the year on a positive note after sharp gains in December 2017, trade war concerns have taken a toll on copper.
Is Cleveland-Cliffs Well Placed amid Changing US Steel Dynamics? As a result, investors who are interested in Cleveland-Cliffs (CLF) track US steel demand. In this article, we’ll see how investors can track the demand for US steel by monitoring demand indicators.
China is the world’s biggest copper importer. Copper mining is concentrated in Latin America, and companies including Southern Copper (SCCO) and Antofagasta (ANTO) operate copper mines in the region. Copper, which is considered an indicator of the global economy, is languishing near the $6,000 per metric ton level after having topped $7,000 per metric ton earlier this year.
Cleveland-Cliffs’ (CLF) customers, including AK Steel and ArcelorMittal, are directly affected by steel imports into the United States. As a result, investors should track these data to get a sense of the future shipment outlook for CLF.
China is the world’s largest steel producer, consumer, and exporter. Chinese steel exports form a minuscule amount of US steel imports. However, the country’s steel exports still impact US steel companies like U.S. Steel (X), AK Steel (AKS), and Nucor (NUE), as higher Chinese steel exports put pressure on global steel prices, which eventually impacts the US steel pricing environment. Notably, US steel prices have risen sharply this year, hurting earnings of some of the end users. The industrial sector (DIA) has underperformed this year amid the US-China trade war scare.
With the S&P 500 Index near its high, a pullback in the stock market is possible this year. "Since we are back close to the highs for the S&P 500, risks of a pullback have certainly risen," said Stone, the founder of Stone Investment Partners and the former chief investment strategist at PNC Financial for 18 years, to CNBC. "Third-quarter earnings are probably set to grow around 20%." (See also: Morgan Stanley Says Biggest Correction Since Feb Looming.
Gold prices (IAU) have been on an almost one-way downward trajectory since mid-April. Although the Federal Reserve didn’t raise rates during its August meeting as was widely expected, it sounded more bullish on the US economy (SPY)(DIA). The Fed was also upbeat on household spending and business fixed investment in the US.
The Section 232 tariffs have been a bone of contention between US steel producers and their end users. According to Reuters, Kinder Morgan (KMI), Hess (HES), and Plains All American Pipeline (PAA) are among the companies that have requested exemptions from the Section 232 tariffs. Along with exemptions defined by country, the US Department of Commerce is also considering product-related exemptions from the Section 232 tariffs.
A lot will be made of the VIX (VXY)(VXX) piercing below 11 today. I have know some investors who love it when volatility falls like this. To them, it signals calm in the market (SPY)(DIA). To other investors, it signals complacency. They believe that market participants aren’t paying attention to risks, and that the market is due for a fall.
According to the EIA’s (U.S. Energy Information Administration) report on August 1, US crude oil inventories rose by ~3.8 MMbbls (million barrels) to ~408.7 MMbbls in the week ending on July 27. The market expected a fall of 2.8 MMbbls, according to Reuters. US crude oil September futures fell 1.6% on August 1.
On August 6, US crude oil September futures rose 0.8% and settled at $69.01 per barrel. On the same day, the Energy Select Sector SPDR ETF (XLE) rose 0.4%. The rise in energy stocks might have helped the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) gain 0.4% and 0.2%, respectively, on August 6.