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HA – Here’s What Moved the Markets in September 2019

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September 3

  • PMI came in a 50.3, slightly higher than the expected 49.9, but lower than July’s 50.4–overall this index reading is still within a 10-year low.
  • ISM manufacturing drop below 50 to 49.1 in August indicates that a rate cut in September will be more likely, possibly as large as a 50 basis points.
  • Construction spending edged up 0.1 percent to, slightly lower than the expected 0.2-0.3 consensus range.

September 4

  • Indices higher due to an easing of geopolitical tensions in Hong Kong, the U.K. and in Italy.
  • Trade deficit came in at -$54.0 billion, which is down from June’s revised -$55.5 billion but still over -$53.9 billion average over the second quarter.
  • Beige Book report described modest economic activity similar to reports in the prior reports in June and July.

September 5

  • Stock market higher after China’s Commerce Ministry said its trade team will hold talks with its US counterparts in mid-September in preparation for high level negotiations in the first part of October.
  • August’s ADP employment change report showed the nations businesses created 195,000 private-sector jobs in August, which compares to the estimate of a gain of 150,000. The August number was above the highest analyst estimate.
  • Initial weekly US jobless claims increased 1,000 to 217,000 in the week ended August 31. Consensus expectations had called for initial claims to be 215,000.

September 6

  • Stock markets across the globe found support in news that China’s central bank moved to support the economy by reducing reserve requirements for lenders.
  • US indices remain slightly lower from unchanged given weaker than expected employment numbers–the US added 130,000 payrolls in August, which compares to the anticipated 163,000 gain.
  • The unemployment rate was unchanged at 3.7% for the third consecutive month, as expected, and remains near a 50-year low.

September 9

  • Indices across the globe initially strengthened on news that economic data from Europe came in better than forecast.
  • Additional US index support arrived when US Treasury Secretary Steven Mnuchin said he does not see the threat of a recession, and that the US will be discussing currency issues with China in the next round of talks.
  • Consumer credit rose sharply well above expectations to $23.3 billion as consumers ran up their credit-card debt after paying down some of it in the previous month.

September 10

  • The NFIB small business sentiment index fell 1.6 points to 103.1 in August, which compares to the median estimate of 103.5.
  • Job openings edged lower in a trend that supports the likelihood of a Fed rate cut–job openings totaled 7.21 million in July for the second lowest total since May last year.
  • The JOLTS report likely supported US indices, which initially were pressured early in the day by uncertainty regarding the coming FOMC rate decision.

September 11

  • Equity markets across the globe advanced ahead of the expected easing of credit conditions from the ECB and after China exempted some U.S. products from tariffs.
  • China said higher tariffs wouldn’t be levied against a variety of US imports for a year, beginning on September 17, and that it would review additional products for exemption.
  • The PPI increased by 0.1% as expected. Minus volatile food and energy categories, producer prices advanced 0.3%, which compares to the anticipated 0.2% increase.

September 12

  • Core inflation rose 0.3 percent in August, which was higher than expected.
  • The results favor hawkish perspectives at the coming FOMC meeting, lowering the likelihood of a large 50-basis-point rate cut.
  • Jobless claims came in lower than expected at 204,000 as compared with a 215,00 consensus.

September 13

  • Retail sales in August increased 0.4% when a gain of 0.2% was expected. Retail sales, excluding autos, were unchanged when up 0.2% was anticipated.
  • Prices for foreign made goods imported into the U.S. fell 0.5% in August from July. Economists had estimated a 0.4% decline.
  • Despite their slight decline today, US indices are edging toward record highs.

September 16

  • Attacks on Saudi Arabia’s oil facilities caused global indices to plunge over fears that a surge in oil prices could slow down global economic growth.
  • The attacks knocked out an estimated 5.7 million barrels of daily production.
  • On Sunday, President Donald Trump said he authorized the release of oil, if necessary, from the Strategic Petroleum Reserve.
  • The Empire State Manufacturing Survey’s general business conditions index, compiled by the Federal Reserve Bank of New York, was 2.0 in September, which is down from a 4.8 reading in August and 4.3 in July. Economists expected an index reading of 3.0.

September 17

  • Global indices opened lower due to heightened tensions in the Middle East.
  • The August industrial production report showed an increase of 0.6% when up 0.2% was expected and August capacity utilization was 77.9%, which compares to the anticipated 77.6%.
  • Housing Market Index came in at 68, stronger than economist expectations of 66.
  • FOMC meetings begin today.
  • Short-term borrowing rates in the overnight credit markets inexplicably skyrockets–the Federal Reserve responds by pumping over $53 billion into the money markets, its first “repo” action since the 2008 financial crisis.

September 18

  • The Federal Reserve cuts rates by 25 basis points, calling it another “mid-cycle adjustment” after which US indices plunged, the Dow sinking by 170 points.
  • Powell’s comments later in the day–hinting at balance expansion (e.g. more “QE”)–supported a rebound across all US indices, the Dow rising by 208 points, ending in a modest 38-point gain.
  • Turmoil in short-term borrowing rates continued, prompting the Fed on Wednesday to pump another $75 Billion into the money markets.

September 19

  • Jobless claims were 208,000 in the week ended September 14, which is near a five week low. Economists expected jobless claims to rise to 215,000.
  • The September Philadelphia Fed manufacturing index was 12.0, above 9.5 expectations.
  • Existing home sales continued advancing, coming in at 5.490 million in August, beating consensus expectations of 5.30 to 5.42 million.

September 20

  • Indices opened higher on the winds of global economic stimulus.
  • China reduce interest rates, becoming the third country after the ECB and the US Federal Reserve to lower benchmark rates.
  • The increasing trend has been perceived as leaving the door open for forthcoming monetary stimulus across on a global scale.

September 23

  • Stocks are mixed due to uncertainty over the US-China trade negotiations and tensions in the Middle East.
  • President Trump rejected suggestions of a partial agreement, opting for a complete deal.
  • The Chicago Fed’s National Activity Index, came in higher at 0.10, as cmopared with expectations of -.06.
  • PMI came in at 51.0, lower than economist expectations of 51.2.

September 24

  • Impeachment drama in Washington weighed on markets today along with the typical global economic concerns.
  • The consumer confidence report came in much lower at 125.1 than consensus range of 129.5 to 137.5.
  • Richmond Fed manufacturing index also came in much lower at -9 when -1 was expected.

September 25

  • Good results on the housing market and vague encouragement on the trade front helped take investor minds off the Washington political drama, lifting markets today.
  • Shares of Nike were perhaps the biggest driver as its earnings of 0.86 far exceeded analyst expectations of 0.71.

September 26

  • US markets are higher on US-China trade optimism after China said it was prepared to make progress in upcoming trade negotiations.
  • President Trump on Wednesday said both sides on the same page more or less and that an agreement could happen sooner than most think.
  • US GDP in the second quarter increased at a 2.0% annualized rate, which was what economists had predicted.
  • Initial jobless claims remain at historically low levels. Claims were up 3,000 to 213,000 in the week ended September 21 when analysts had expected jobless claims to increase to 212,000.

September 27

  • Markets slid as a fresh wave of trade policy matters pressured stocks.
  • Indexes fell on the news that President Trump may limit investment in Chinese companies.
  • Micron Technologies fell despite beating earnings expectations on negative guidance.
  • To date, a large majority of S&P 500 stocks have issued negative guidance, the largest sector being Tech, and the largest negative leading industry being Semiconductors (led by MU).

 

September 28

 

  • Stocks recovered on very little news to end the third quarter on an upbeat note.
  • Officials in Washington pushed back on the reports they were considering restricting investment in Chinese companies.
  • Analyst comments on iPhone demands helped push up shares of AAPL which, along with Microsoft, appear to be two of the stronger tech companies heading into the coming quarter.

 

Karl Montevirgen

Market Strategist | Halifax America

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