The Market Week Ahead: Aug. 5 – Aug. 9

 

Aug. 5, 2019 –  This week started out where last week left off, with stocks falling on concerns about the ongoing, and escalating, trade war. 

At this point, it isn’t just sectors that are heavily exposed to trade between the U.S. and China getting hit. The action in stocks today looks like traders betting on a global economic slowdown. Oil prices fell, which is obviously bad for energy stocks, but transportation stocks, which often move counter to fuel prices were also lower, which suggests that traders are anticipating a slowdown in all kinds of economic activity.

As one might expect, bonds rallied. Ten-year yields hit levels not seen since before President Trump took office, while the yield curve became more inverted. 

The economic calendar is pretty light this week. The earnings calendar is full, but market reactions to earnings reports have been to punish losers harshly while companies that beat expectations are seeing modest gains. That kind of asymmetrical reaction suggests that sentiment was on the bearish side before the selling really started, and recent news seems unlikely to turn things around.

A detente in the trade war will likely be necessary to halt the decline. In the very short term, that could mean an end to the tit-for-tat escalation. In the longer term, the talks that are scheduled to begin again in September will need to provide some actual progress. It seems unlikely that reports about “productive” talks will boost markets much given what has happened since the last round of talks.

Economic Events this Week

A big surprise from Friday’s PPI number could be interesting, but it seems like trade-war tweets, and the reaction to them, will probably be the biggest driver of the market today.

  • Monday
    • 10:00 a.m. – ISM Non-Manufacturing Index
  • Wednesday
    • 10:30 a.m. – EIA Crude Oil Inventories
  • Friday
    • 8:30 a.m. – PPI

Earnings Reports this Week

Another busy week for earnings this week.

Tuesday:

  • Before the bell: BDX, DUK, ZTS, AGN, FIS
  • After the bell: DIS, FLT, MCHP, PXD, MTCH

Wednesday:

  • Before the bell: CVS, CNP, ATHM, IONS, NRG
  • After the bell: BKNG, AIG, ET, MNST, FOXA

Thursday:

  • Before the bell: KHC, KDP, LNG, MGA, AZUL
  • After the bell: UBER, ATVI, CBS, BAP, DXC

Friday:

  • Before the bell: HPT, CLNY

Sector Analysis 

Strong Sectors past Month

These sectors are up 5% or more in the last 20 trading days:

  • Junior Gold Miners
  • Silver

Weak sectors past month

These sectors are down 5% or more in the last 20 trading days:

  • Oil & Gas Exploration
  • Oil Services
  • Coal
  • Steel
  • Robotics & Artificial Intelligence
  • Retail
  • Energy
  • Biotechnology
  • Regional Banks
  • Banks
  • Insurance
  • Agribusiness
  • Homebuilders
  • Healthcare

Strong sectors past five trading days

These sectors are up more than 3% in the last five days.

  • Junior Gold Miners
  • Gold Miners

Weak sectors past five trading days

These sectors are down more than 3% in the last five days.

  • Oil Services
  • Steel
  • Semiconductors
  • Coal
  • Robotics & Artificial Intelligence
  • Regional Banks
  • Banks
  • Oil & Gas Exploration
  • Metals & Mining
  • Retail
  • Financials
  • Energy
  • Industrials
  • Insurance
  • Biotechnology
  • Homebuilders
  • Consumer Staples
  • Agriculture
  • Healthcare

Bobby Raines

Bobby Raines

Bobby Raines is the Managing Editor of the Market Intelligence Center. He has degrees in Mass Communications and History from Emory & Henry College. Bobby worked at a mid-sized daily newspaper before making a switch to covering the financial industry full time in the years leading up to the financial crisis. He has been a member of the Fresh Brewed Media team since 2011 and has served as a writer and analyst. You can write to him at braines@marketintelligencecenter.com or follow him on Twitter: @BRatMICenter.

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