September 04, 2018

Weekly Market Commentary September 4, 2018

The Markets

I hope you had a restful Labor Day weekend. Markets were fired up last week after the United States and Mexico agreed on new trade rules. The S&P 500 Index reached an all-time high and finished the month of August up about 3 percent. During the latter half of last week, though, the S&P 500 gave back some gains. A hitch in the trade talks between the United States and Canada caused the index to stumble. It’s worth noting that despite the headlines on the tariff issue, which keeps getting many new arrangements, has ended up being done later. I would not be surprised if this works out with Canada the way Mexico did. The United States exported about $341 billion of goods and services to Canada in 2017, according to The Office of the U.S. Trade Representative website. Our top exports to Canada during 2017 included:

  • Services ($58 billion)
  • Vehicles ($52 billion)
  • Machinery ($43 billion)
  • Electrical machinery ($25 billion)
  • Agricultural products ($24 billion)
  • Mineral fuels ($20 billion)
  • Plastics ($13 billion)

Prepare for a shake up!

From Reuters to Marketplace, economic and financial news shows like to ‘do the numbers.’ They often review economic indicators, Federal Reserve rate changes, or benchmark index performance. In general, these statistics are intended to help people gauge how economies and markets are performing. For instance, when Gross Domestic Product (GDP) – the value of all goods and services produced by a nation during a certain period of time – moves higher, it means the economy grew during the period. When GDP moves lower, the economy contracted during the period. Asset managers and investors rely on benchmark indices, like the S&P 500 Index, to measure the relative performance of investment portfolios. The S&P 500 is a benchmark for large U.S. company stocks. It includes companies from diverse sectors including:

  • Information technology
  • Healthcare
  • Financials
  • Consumer discretionary
  • Industrials
  • Consumer staples
  • Energy
  • Utilities
  • Real estate
  • Materials
  • Telecommunications services

But, wait, change is coming! Soon, benchmark indices will have a new sector. At the end of September 2018, Telecommunications Services will become Communication Services.

Focus On The Positive

“Progress is impossible without change, and those who cannot change their minds cannot change anything.”  –George Bernard Shaw, Irish playwright