Market Insights 7/18/2019

U.S. equities were able to finish with modest gains after a rocky session, as uncertainty was palpable amid a host of divergent earnings and economic reports, as well as continued angst over a U.S.-China trade deal.

Netflix fell sharply after disappointing with its subscriber growth, but eBay and Union Pacific saw gains after their respective results.

Treasury yields, the U.S. dollar and crude oil prices were all lower, while gold jumped.

The Markets…

The Dow Jones Industrial Average inched 3 points higher to 27,223

The S&P 500 Index was up 11 points (0.4%) to 2,995

The Nasdaq Composite gained 22 points (0.3%) to 8,207

In moderate volume, 734 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq

WTI crude oil fell $1.48 to $55.30 per barrel and wholesale gasoline was down $0.05 at $1.83 per gallon

The Bloomberg gold spot price advanced $18.23 to $1,444.80 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.6% lower at 96.69

Leading Indicators decline, jobless claims rise, regional manufacturing activity jumps

The Conference Board’s Index of Leading Economic Indicators (LEI) for June decreased 0.3% month-over-month — the first decline of the year—versus the Bloomberg projection of a 0.1% gain and compared to May’s unrevised flat reading. Positive contributions came from credit, average workweek and stock prices components of the index, but were more than offset by declines for building permits, ISM new orders and jobless claims.

Weekly initial jobless claims increased by 8,000 to 216,000, matching the Bloomberg estimate, with the prior week’s figure being revised lower by 1,000 to 208,000. The four-week moving average dipped by 250 to 218,750, while continuing claims fell by 42,000 to 1,686,000, south of estimates of 1,700,000.

The Philly Fed Manufacturing Index in July jumped to 21.8, from the 0.3 posted the month prior, well above expectations of a rise to 5.0, and moving comfortably into expansion territory (a reading above zero).

Treasuries finished higher, as the yield on the 2-year note dropped 8 basis points (bps) to 1.75%, the yield on the 10-year note declined 3 bps to 2.03%, and the 30-year bond rate declined 1 bp to 2.57%.

The only item on tomorrow’s economic calendar is the preliminary University of Michigan Consumer Sentiment Index for July, forecasted to increase to 98.7 from June’s 98.2 level.

Europe mixed, Asia lower on data and flared-up trade uncertainty

European equities were mixed, with the global markets digesting the Q2 earnings season, while U.S.-China trade uncertainty flared-up recently to apply some pressure to conviction. euro dipped versus the U.S. dollar and bond yields in the region lost ground. The British pound rose versus the greenback after U.K. retail sales for June came in stronger than expected.

Stocks in Asia finished lower with the global markets appearing to turn cautious amid resurfacing U.S.-China trade uncertainty, while scrutiny continued regarding the start to Q2 earnings season. A host of economic data was sifted through with a mixed response, as Japanese exports in June fell more than anticipated, Australian employment change was below estimates for last month, and the Bank of Korea unexpectedly cut its benchmark interest rate. Japanese equities dropped, with the yen moving higher, while markets in South Korea, mainland china, Hong Kong, Australia and India were also lower.