September 18, 2018
In this month’s blog, I’ll discuss some of the major headlines that influenced markets in August. I will also provide insight into what these developments could mean for you as an investor.
U.S. stocks celebrated a major milestone in August. On the 22nd, our current bull market officially became the longest in U.S. history. At over 3,400 days old—or more than 9 years—we have never gone this long without a bear market.[i]
By month’s end, domestic indexes had recorded their best August performances in years. The S&P 500 increased by 3%, and the Dow added 2.1%. Both had their largest August gains since 2014. The NASDAQ did even better, growing by more than 5.7%. That increase was its best August since 2000.[ii]
Throughout the month, trade tension remained—as has been the case for much of 2018.[iii] The U.S. and China failed to reach any real breakthroughs in their ongoing trade skirmishes.[iv] Meanwhile, renegotiating the North American Free Trade Agreement (NAFTA) did make some progress, as the U.S. and Mexico announced a new trade agreement. However, talks with Canada—NAFTA’s 3rd member—didn’t reach any resolution. As August ended, the future of NAFTA remained unknown.[v]
In addition to trade, concerns about Turkey’s plummeting currency also captured investors’ attention. During August, the lira hit its lowest point ever compared to the U.S. dollar.[vi] The currency’s value has dropped as inflation spiked to its highest point since 2003. Some analysts worry that Turkey’s economic problems could spread to other countries.[vii] It’s not likely to spread, though. Turkey has a relatively small economy and still has opportunities to help relieve its spiraling inflation.[viii]
So, between trade tension and emerging market concerns—not to mention geopolitical drama—why did markets perform so well in August? The U.S. economy continues to show that it is in good condition.
For example, August brought the 2nd publication of Gross Domestic Product (GDP) between April and June. The data indicated the economy grew even faster than originally measured.[ix] The labor market also stayed strong in August as unemployment numbers approach lows not seen in decades.[x] In addition, business investment spending showed positive data, and one measure of small- to mid-size organizations’ sentiments hit its highest point in 35 years.[xi] Perhaps unsurprisingly, given this confluence of data, consumers are also feeling good. Consumer confidence reached its highest reading since 2000.[xii]
Of course, market risks remain, and we will continue to follow many factors in the coming months. From emerging markets’ health to domestic political developments, we have a number of details to monitor as related to market performance.
That’s it for this month’s educational economic update.
Once again, this is Dr. John Colegrove with Calder & Colegrove Investment Group signing off for the month of September 2018.
Please remember that nothing we talk about here is a recommendation. If you would like to discuss your personal financial situation, please give us a call at 678-482-0686. We’d be happy to talk to you.
Required Disclosure
While we believe the information in this report is reliable, we cannot guarantee its accuracy. Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining markets. The indices mentioned are unmanaged and cannot be invested into directly. Past performance does not guarantee future results.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
[i] https://money.cnn.com/2018/08/22/investing/bull-market-longest-stocks/index.html
[ii] https://www.cnbc.com/2018/08/31/us-markets-global-trade-tensions-ramp-up.html
[iii] https://am.jpmorgan.com/gb/en/asset-management/gim/adv/insights/market-insights-monthly-market-review-august-2018
[iv] https://www.cnbc.com/2018/08/24/us-stocks-china-trade-talks-end-powell-to-speak-at-jackson-hole.html
[v] https://www.reuters.com/article/us-usa-stocks/wall-street-mixed-as-u-s-canada-trade-talks-end-idUSKCN1LG1IU
[vi] https://www.cnbc.com/2018/08/17/us-markets-china-us-trade-developments-earnings-data-on-the-agenda.html
[vii] https://www.bloomberg.com/news/articles/2018-09-02/turkey-to-set-tone-again-for-emerging-markets-after-august-pain
[viii] https://lplresearch.com/2018/08/16/market-update-thursday-august-16-2018/
[ix] https://www.bloomberg.com/news/articles/2018-08-29/u-s-second-quarter-growth-revised-up-to-4-2-on-software-trade
[x] https://www.cnbc.com/2018/08/23/us-weekly-jobless-claims-aug-18-2018.html
[xi] https://am.jpmorgan.com/gb/en/asset-management/gim/adv/insights/market-insights-monthly-market-review-august-2018
[xii] https://www.marketwatch.com/story/consumer-confidence-soars-to-18-year-high-2018-08-28
July 05, 2022
June 07, 2022
May 31, 2022
May 20, 2022
February 24, 2022
June 30, 2021
March 25, 2021
March 11, 2021
March 05, 2021
February 10, 2021
February 09, 2021
February 05, 2021
February 04, 2021
January 28, 2021
January 28, 2021
January 14, 2021
January 14, 2021
January 14, 2021
January 14, 2021
January 13, 2021
January 07, 2021
December 16, 2020
December 16, 2020
December 10, 2020
December 10, 2020
December 10, 2020
December 09, 2020
December 09, 2020
December 09, 2020
December 09, 2020
December 07, 2020
December 04, 2020
December 03, 2020
December 03, 2020
December 03, 2020
December 03, 2020
December 02, 2020
December 02, 2020
December 02, 2020
December 02, 2020
December 01, 2020
December 01, 2020
November 25, 2020
November 24, 2020
November 20, 2020
November 19, 2020
November 19, 2020
November 09, 2020
November 01, 2020
October 28, 2020
October 22, 2020
October 22, 2020
October 21, 2020
October 21, 2020
October 21, 2020
October 21, 2020
October 21, 2020
October 15, 2020
October 15, 2020
October 15, 2020
October 15, 2020
October 14, 2020
October 14, 2020
October 13, 2020
October 08, 2020
October 08, 2020
October 08, 2020
October 08, 2020
October 07, 2020
October 06, 2020
October 02, 2020
October 02, 2020
October 02, 2020
October 02, 2020
October 01, 2020
September 29, 2020
September 24, 2020
September 24, 2020
September 24, 2020
September 24, 2020
September 23, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 18, 2020
September 17, 2020
September 17, 2020
September 17, 2020
September 16, 2020
September 16, 2020
September 16, 2020
September 16, 2020
September 16, 2020
September 11, 2020
September 11, 2020
September 11, 2020
September 11, 2020
September 11, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 10, 2020
September 09, 2020
September 09, 2020
September 09, 2020
September 09, 2020
September 09, 2020
September 08, 2020
September 08, 2020
September 02, 2020
September 02, 2020
August 28, 2020
August 28, 2020
August 27, 2020
August 26, 2020
August 26, 2020
August 26, 2020
August 26, 2020
August 21, 2020
August 06, 2020
August 06, 2020
August 04, 2020
July 31, 2020
July 30, 2020
July 28, 2020
July 22, 2020
July 21, 2020
July 20, 2020
July 14, 2020
July 14, 2020
July 13, 2020
July 12, 2020
July 07, 2020
July 01, 2020
June 30, 2020
June 23, 2020
June 16, 2020
June 09, 2020
April 08, 2020
March 16, 2020
March 12, 2020
February 28, 2020
February 25, 2020
January 31, 2020
August 05, 2019
July 03, 2019
June 28, 2019
June 28, 2019
June 28, 2019
June 19, 2019
June 12, 2019
June 07, 2019
May 28, 2019
September 18, 2018
September 07, 2018
August 26, 2018
August 26, 2018
August 26, 2018
March 05, 2018
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
The LPL Financial registered representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, AK, AZ, CA, DC, FL, GA, IN, KY, LA, MI, MO, MS, NC, NV, NY, OH, SC, TN, TX, VA, WA, WI.
Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.
4485 Tench Rd Ste 2510
Suwanee, GA 30024