Closing Market Summary: Sideways Week Ends on Lower Note
The stock market ended the week on a lower note after a midday swoon pressured the S&P 500 (-0.5%) into negative territory. The benchmark index lost 0.5% for the week while the Nasdaq (-0.8%) underperformed, surrendering 0.7% since last Friday.
The trading day started with slight gains amid news that the Trump administration will temporarily exempt some Chinese products from tariffs. However, a midday report from Reuters noted that the Chinese trade delegation, which visited Washington for talks, cancelled its plan for a visit to Montana. That report knocked the major averages to session lows, fueling renewed worries about how much progress has really been made in the ongoing negotiations.
The major averages briefly recovered from their lows in the afternoon but returned toward those lows before the close as cyclical sectors struggled. The top-weighted technology sector (-1.1%) was among the worst performers, widening its loss in the afternoon. Chipmakers got off to a weak start and remained under pressure into the close. The PHLX Semiconductor Index lost 1.8%, surrendering 2.7% for the week. Xilinx (XLNX 96.55, -7.07, -6.8%) lagged from the start after the company's CFO resigned. Texas Instruments (TXN 126.67, -2.16, -1.7%) lost nearly 2.0% despite increasing its quarterly dividend.
Elsewhere in technology, Fitbit (FIT 4.10, +0.43, +11.7%) jumped to its July low after Reuters reported that the company may put itself up for sale while Apple (AAPL 217.73, -3.23, -1.5%) surrendered this week's modest gain as the company's refreshed product line hit store shelves.
Like technology, the consumer discretionary sector (-1.2%) fell to lows after the midday report cast doubt on the amount of progress in trade negotiations. General Motors (GM 37.37, -0.41, -1.1%), however, underperformed throughout the day after Dayton Daily News reported that a GM plant in Moraine, Ohio will be idled due to the ongoing UAW strike.
On the upside, countercyclical sectors like health care (+0.6%) and utilities (+0.4%) spent the day in positive territory. The health care sector extended this week's gain to 1.0%, drawing some encouragement from a report that the Senate will not endorse a plan put forth by House Speaker Pelosi to lower drug prices.
Treasuries spent the bulk of the day near their flat lines before rallying to highs in the afternoon. The 10-yr yield slipped two basis points to 1.76%.
Today's trading volume was well above average due to quadruple witching. As a result, more than 2.5 billion shares changed hands at the NYSE floor.
Participants did not receive any economic data on Friday, and Monday's calendar is also free of notable releases.
- Nasdaq +22.3% YTD
- S&P 500 +19.4% YTD
- Russell 2000 +15.6% YTD
- Dow Jones Industrial Average +15.5% YTD
What do Versace, J Lo and Google have in common?
The singer modelled an updated version of the dress that changed internet searches forever
Donatella Versace helped build the internet, and now she might just “break” it.
At Friday’s Versace show in Milan the Italian fashion designer enlisted American actress and singer Jennifer Lopez to walk the runway in an updated version of the jungle print dress the star wore to the Grammys in 2000.
The story behind the original Versace dress is that millions of people went online after the event to search for images of the singer wearing it, making it the most popular search query Google had seen at the time. However, when they couldn’t find the right picture, heads at the search engine were inspired to create Google Images.
The audience went wild, as the singer strutted down the catwalk in a version of the dress which had significantly less fabric than the first one. Just two strips of fabric across the bust and a slashed skirt.
And Donatella knows how to create anticipation. After a catwalk show which featured variations on the jungle print theme, giant screens around the circular catwalk showed her asking Google Assistant “now. Google. Show me the real jungle dress” before the star appeared. Cue mass filming, photographing and Instagramming. It was a nicely choreographed fashion moment that illustrates how the internet has changed the fashion landscape over the last twenty years.
It also underlines how much harder it is now to create dresses with the same level of impact because we are so overwhelmed with images competing for our attention. However, Versace has produced numerous garments which genuinely deserve the overused “iconic’ label, such as the black dress held together with safety pins worn by Liz Hurley in 1994. And this show is a reminder of their place in pop culture as well as fashion history.
As for the new collection, which may have got temporarily lost in the JLo excitement, there were strong, fierce clothes, with exaggerated 1980s-inspired shapes and of course, jungle print. It came in an airbrushed version on a skinny suit and matching shirt, on a tiny silk mini, a clear mac, and on a shimmering mini dress with clusters of large sequins and beads which looked like dripping foliage. Suits had gold palm tree brooches pinned to them to match the towering gold palm tree in the centre of the catwalk.
Eveningwear included a shimmering red sequin cocktail dress with puffed sleeves and tropical looking 3D sequinned flowers. 1990s supermodel Amber Valetta appeared in a long black column dress with moulded bra cups. Sharp black tailored jackets — some worn as dresses, some in leather — came with gold buttons, and sweetheart necklines, and also with huge puffed sleeves.
When it came to more casual looks, a tie-dye marble-effect was splashed over a check jacket, and also appeared on shoulder-padded hooded tops, while other more relaxed clothing included skinny jeans worn with a puffed sleeve trenchcoat and stilettos.
Everything was accessorised with chunky gold and crystal earrings, and bangles. Donatella Versace said, “this show is dedicated to all women, from the millennials to non-millennials, to working women, or women raising a family.” This show was bold, it was sexy, it was totally fabulous.
Imperial College launches student-run fund
University’s endowment provides £100,000 to seed investment vehicle
The first independent student-run investment fund has been launched in the UK, with scholars from London’s Imperial College Business School pitting their wits against professional asset managers.
Student-managed funds, which take academic theory from the lecture theatre and put it to work in the markets, are popular in the US, with initiatives at several business schools, including Columbia University in New York and the University of Michigan.
But so far similar initiatives in the UK have been mainly limited to student societies overseeing virtual accounts. The only other student fund investing real money in the UK is the Griff Investment Fund at the University of York, where students oversee £13,000 in assets. The global equities portfolio forms part of the university’s endowment fund and was launched in 2013.
Although the Imperial fund has been seeded with £100,000 of cash from Imperial’s endowment, it is run independent of it.
“Our fund is unique as it is an actual investment organisation under Imperial College Business School, possessing the organisational, infrastructural and legal background and the necessary institutional accounts for trading and investment with real money,” said Bálint Geiger, co-chief investment officer of the Imperial fund.
The fund is split between a market-neutral equities portfolio and a quantitatively managed portion, which is run by the business school’s computer science students.
“Our biggest selling point is the quantitative department,” Mr Geiger added. “The whole investment industry is moving towards this strategy.”
The fund has so far invested £10,000 in nine European stocks, including Danone, Volkswagen and EDF, as well as two exchange traded funds to hedge its positions.
It is overseen by an advisory board that includes academic staff and investment industry figures, including Victor Li, a fund manager at JPMorgan Asset Management, and Guillaume Benhamou, a private equity manager at Tikehau Capital.
Up to 80 students have been involved in the initiative so far, with the management team changing each academic year. It expects to invest up to £40,000 this year, with the rest of the start-up capital and additional funds provided by donors being available for future students.
Three years ago, Columbia Business School launched the 5x5x5 Student Value Investment Fund, which was backed by Thomas Russo, a stockpicker in Pennsylvania. The fund invests $250,000 a year in five investment ideas that have been put together by students on the school’s value investing course.
Michigan Ross business school has several student-run funds, including the first such impact fund in the US, with combined assets of more than $10m.
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