The Market Week Ahead: Sep. 10 – Sep. 14

Sept. 10  – The market seems to be taking a rest after a surge in August helped push the NASDAQ and S&P 500 to new all-time highs. The economic data remains good. Last week’s employment report keeps the recent trends going, and other measures of economic health remain positive as well.

Which is not to say that it is all smooth sailing for stocks. The jobs report showed wages rising at 2.9% annually, which is good for workers, but could compress profit margins if companies have to start paying out more in wages. The other option is to raise prices, which keeps profit margins the same, but negates the effect of higher wages for workers. 

Trade remains the big story. The Trump administration is still in talks with Mexico and Canada about a re-worked NAFTA. China is the biggest potential story though, A deadline passed last week that allows Trump to enact new duties on $200 billion in Chinese goods at any time. The president also said he wants to put tariffs on $267 billion in goods after that $200 billion. That would likely have  several detrimental effects on the economy and the market. First, China would retaliate in some way. Second, a tariff is a tax that paid when a good crosses a border. So the cost of these tariffs will either be swallowed by companies, slashing profits, or passed on to consumers in the form of higher prices. 

Apple has already said that some of it’s products are on the list of goods to be hit, and other companies are surely in the same boat. Whether this results in more expensive iDevices, or lower profits for Apple remains to be seen, but money paid in tariffs is money that consumers can’t spend elsewhere in the economy.

Economic Events this Week

Inflation and retail sales data are of interest this week. 

  • Wednesday
    • 8:30 a.m. – PPI
    • 10:30 a.m. – Crude Inventories
  • Thursday
    • 8:30 a.m. – CPI
  • Friday
    • 8:30 a.m. – Retail Sales
    • 9:15 a.m. – Industrial Production
    • 9:15 a.m. – Capacity Utilization
    • 10:00 a.m. – Univ. of Michigan Consumer Sentiment – Prelim

Earnings Reports this Week

Kroger and Oracle are both big names, but there’s nothing here that’s going to effect the broader market.

Wednesday:

  • After the bell: PVTL, SAIC

Thursday: 

  • Before the bell: ORCL, KR, BRC

Friday:

  • Before the bell: PLAY

Sector Analysis 

These lists are starting to skew toward the downside, reflecting recent weakness after the market’s rally in August.

Strong Sectors past Month

There is only one sector up 5% or more in the last 20 trading days:

  • Cyber security

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

  • Gold Miners
  • Junior Gold Miners
  • Solar
  • Silver
  • Coal
  • Oil Services
  • Steel

Strong sectors past five trading days

No sectors are up  3% or more in the last five trading days:

Weak sectors past five trading days

  • Oil Services
  • Oil & Gas Exploration
  • Gold Miners
  • Junior Gold Miners
  • Coal
  • Solar
  • Biotech
  • Robotics
  • Steel
  • Internet

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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