Market Recap Week ending 8/16/19

-Darren Leavitt, CFA

A volatile week of trading entertained investors as uncertainty around trade, and an inverted yield curve stoked fears of an impending recession.  The major US equity indices ended the week with losses; however, steep losses incurred at the beginning of the week were somewhat recovered on the back of better than expected retail sales (reported 0.7% vs. consensus of 0.3%- the consumer still out spending) and on the announcement that some tariffs imposed on Chinese goods would be delayed until December.  Notably, the delay of tariffs were assigned to computers and cellphones, which in turn benefited technology component manufactures such as semiconductors.    Retailer, Walmart, also helped the cause with a better than expected earnings report.

The S&P 500 lost -1.03% on the week while the Dow gave up -1.53%, the NASDAQ lost -0.79%, and the Russell 2000 shed -1.28%.  Investors once again piled into US Treasuries which sent the 2-10 year spread into negative territory for the first time since 2007.  An inversion of the yield curve has in the past has been a harbinger of a recession, generally within 18 to 24 months after the initial inversion.  The 2-year note yield lost 16 basis points on the week and closed with a yield of 1.47%.  The 10-year bond yield ended the week at 1.54%, down 19 basis points.  Both Gold and Oil were little changed on the week closing at $1508 an Oz and $54.89 a barrel, respectively.   There were no changes to our models last week.

The information in this Market Commentary is for general informational and educational purposes only. Unless otherwise stated, all information and opinion contained in these materials were produced by Foundations Investment Advisers, LLC (“FIA”) and other publicly available sources believed to be accurate and reliable.  No representations are made by FIA or its affiliates as to the informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. No party, including but not limited to, FIA and its affiliates, assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

The views and opinions expressed are those of the authors do not necessarily reflect the official policy or position of FIA or its affiliates.  Information presented is believed to be current, but may change at any time and without notice.  It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Investment advisory services are offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.