Wall Street rallied this week with investors shrugging off another tranche of U.S. tariffs on Chinese goods. The S&P 500 and the Dow touched new records -- the first time that's happened for the Dow since January 26 -- and finished the week with respective gains of 0.9% and 2.3%. The Nasdaq lagged though, slipping 0.3%.
The heavily-weighted financial sector was among the top-performing groups this week with a gain of 2.3%, benefiting from a steepening of the yield curve. The yield on the benchmark 10-yr Treasury note climbed seven basis points to end Friday at 3.07%, while the Fed-sensitive 2-yr yield jumped two basis points to 2.81%.
Conversely, the top-weighted information technology sector (-0.1%) underperformed this week, getting surpassed by consumer discretionary (+0.4%) for the top spot in the 2018 sector standings. The two groups hold year-to-date gains of 18.5% and 18.7%, respectively. For comparison, the S&P 500 is up 9.6%.
In total, eight of the eleven S&P sectors finished in the green, with cyclical sectors showing relative strength. A new sector, communication services, will be born after Friday's close, and it will involve reclassifying several widely-held technology, telecom, and media stocks into the new sector -- including Facebook (FB), Alphabet (GOOG), Verizon (VZ), Netflix (NFLX), and Walt Disney (DIS).
In individual stocks, cannabis names were in focus this week, with Tilray (TLRY) going on a wild ride after its CEO suggested that his business would be a "smart hedge" for major pharmaceutical companies. TLRY shares traded as high as $299.46/share -- 175% above last Friday's close -- before ending the week at $123.00/share (+13%).
Looking ahead, the Federal Reserve will release its latest policy directive on Wednesday. The market is all but certain that the central bank will hike rates -- with the CME FedWatch Tool placing the chances at 100% -- so investors will be more focused on the Fed's rate forecast, especially for 2019.
Macro :
- Amadeus IT, Kering to Join Euro Stoxx 50; Deutsche Bank Dropped
- Puma, Hikma, PZU, PKO to Join Stoxx Europe 600
- OPEC Gives Tepid Response to Trump’s Demand for Lower Oil Prices
Keep an eye on :
- AMS SM : Amadeus IT, Kering to Join Euro Stoxx 50; Deutsche Bank Dropped
- BEKB BB : Bekaert may sell Italian wire pipe operations to industrial bidders
- BMW GY : German Carmakers, Merkel Discussed Diesel Car Fixes: VDA
- BT/A LN : BT Is Said in Talks to Name Worldpay’s Jansen as CEO, Sky Says
- CNHI IM : *CNH INDUSTRIAL GAINS AS MARIO GABELLI PITCHES ON CNBC
- 1COV GY : Covestro Said to See Weak Industry Demand in Summer: Euro am S.
- DAI GY : German Carmakers, Merkel Discussed Diesel Car Fixes: VDA
- AM FP : Dassault Says Partnership With Reliance Group Is Co.’s Choice
- DRX LN : Drax Group in Talks to buy Iberdrola Assets: Business Telegraph
- ENGI FP : Engie Regulated Gas Tariffs May Rise About 3% on Oct. 1: Figaro
- EI FP : Luxottica, Essilor Seen Reaching Merger Deal by Early Oct.: Sole
- HEN3 GY : Henkel to Offset Weak Growth in Cosmetics W/Brand Offensive: BZ
- HIK LN : Hikma to Join Stoxx Europe 600
- IBE SM : Drax Group in Talks to buy Iberdrola Assets: Business Telegraph
- ILD FP : Italy 5G Auction Bids Reach EU4.42b: Ministry
- KER FP : Kering to Join Euro Stoxx 50; Deutsche Bank Dropped
- PUM GY : Puma, to Join Stoxx Europe 600
- RRS LN : Barrick, Randgold in Late-Stage Merger Talks, Mining Blog Says
- SIE GY : Siemens Likely to Reach Union Deal on Job Cuts by End-Sept: FAS
- LNSX GY : Sixt Sees Year-End Contract Portfolio at Prior Year’s Level
- SRE US : California Governor Vetoes Bill on Utility Rates for Penalties
- TIT IM : Italy 5G Auction Bids Reach EU4.42b: Ministry
- TIT IM : Telecom Italia CEO backed by Vivendi amid resignation rumours
- VCT FP : Vicat Names Chomel as CFO to Replace Souchet
- VIV FP : Telecom Italia CEO backed by Vivendi amid resignation rumours