Trading Week Ended September 1, 2017 


North American Trading Market

Trading US market migrated convincingly higher for the 2nd week back to back as investors and traders continuing to acquire the mid-August dip which dragged the leading averages off their all-time high levels. The S&P500, and the DJIA (Dow Jones Industrial Average), and the Russell 2000 added in 1.4%, 0.8%, and 2.6% respectively. NASDAQ Composite moved straight back into record territory, rising 2.7% to settle in this week at a brand new all-time high level.

Eight out of eleven trading market sectors completed the week in the positive territory: Industrials with plus 1.5%, Consumer Discretionary plus 1.6%, Consumer Staples plus 0.5%, Materials plus 1.9%, Real Estate plus 0.4%, Health Care plus 3.0%, Technology plus 2.1%, and Energy plus 0.8%.

Meanwhile, the following three categories carried out in the negative zone: Telecom Services minus 1.4%, Utilities minus 0.6%, and Financials with minus 0.1%.

Economic numbers were the point of interest this week as investors and traders had been given a variety of economic reports. The most noteworthy of which had been the Friday's Non-Farm Employment Situation Report for August as well as the central Personal Consumption Expenditures (PCE) Price Index for the month of July. The two reports made it easier for the equity market's rate-hike considerations, presenting additional proof that inflation continues to be, and will keep on being, somewhat sluggish.

The main Personal Consumption Expenditures Price Index, in which excludes energy and food, accelerated by 0.1% in July although slipped on a year-over-year basis to plus 1.4% from 1.5  in June. The Federal Reserve has established a year-over-year goal of 2.0 percent for inflation. Therefore July's deceleration does not bode very well for the idea that the Federal Reserve can stick to its outlook of one further rate hike this coming year.

Also, the August Non-Farm Employment Report offered no warning signs of a pick-up in inflation in the near future as it confirmed an additional relatively weaker rise in average hourly earnings of 0.1 percent actual versus 0.2 percent. With a year-over-year basis, average hourly wages have increased by 2.5 percent, is the same within the twelve month period concluding in July.

The Federal Reserve funds futures trading market at present places the likelihood of an additional rate hike this current year at 41.4 percent and views the June of the 2018 FOMC (Federal Open Market Committee) meeting as the in all probability time for the second rate-hike news with an implied chance of 54.4 percent. In the previous week, the market industry anticipated the subsequent rate hike to happen in June of 2018 with an implied odds of 58.0 percent. 

Overseas Markets

Eurozone equities traded higher, as early on robustness in the Euro Dollar relinquished after the encouraging US Manufacturing and Auto Sales data, which complemented positive Manufacturing numbers in China, U.K, and Eurozone. The British Pound continued to be climbing higher as opposed to the US Dollar nevertheless came off of the best levels of the day session.  

The Bond yields in the Eurozone traded much higher. The markets shrugged off the finalization news of the most recent round of BREXIT discussions, with the EU (European Union) lead mentioning is that the debates did not progress quite enough to push into a new phase set in October of this year. 

Markets in Asia-Pacific region ended the week mainly to the upside, helped by encouraging numbers on Chinese Manufacturing output for the month of August, even though the trading markets ended up trodden cautiously in advance of an array of US data on Friday, headlined with the critical August Non-Farm Payroll report. Furthermore, a conviction might have been kept in check as strains with North Korea lingered, and global financial, monetary policy and US politics remained on going.

Other Markets

The US Dollar was back into the limelight following the employment report since the world reserve currency was sold intensely on the weak data before the aggressive snap back rally occur. The US Dollar reclaimed most of its losses versus its key competitors, as the Euro Dollar initially have gotten close to 1.20 handle then dropped back to 1.19 level within a few minutes.

Yellow metal got close to $1330 price, by hitting a whole new rally high on the approach. However, it dropped under $1325 level, as volatile trading adhered to the report. The initial trading day of the September month will most likely be crazy, and this may set the tone for the whole autumn season, as traders and investors are anticipating fireworks following a calm summer activity.

Crude oil was holding up nicely following the latest reversal, and also the commodity experienced small hurt by the disappointing employment numbers. 

What's Ahead for Next Week

After the extended holiday weekend break, up coming week's trading might be influenced by reports on factory orders, service sector activities, as well as international trade number.

The Wall Street attention will almost certainly switch from interest rate hikes possibilities to the Federal Reserve's balance sheet unloading. During the next Federal Open Market Committee meeting, that's tabled for  September 19-20, the central bank is expected to unveil the beginning of a strategy to scale back its huge $4.5 trillion balance sheet fiasco.

The Federal Reserve is likewise to release its Beige Book scheduled for the upcoming week - a compilation of anecdotal data on the economic and financial condition of the twelve Federal Reserve Districts.


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