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Another Dip Ahead of Jackson Hole
23-Aug-18 16:20 ET
Dow -76.62 at 25656.98, Nasdaq -10.64 at 7878.48, S&P -4.84 at 2856.72

https://www.briefing.com/investor/markets/stock-market-update/2018/8/23/another-dip-ahead-of-jackson-hole.htm

[BRIEFING.COM] Stocks dipped for the second day in a row on Thursday in another range-bound day of trading on Wall Street. The benchmark S&P 500 index inched away from its elusive January 26 record close, ending the session lower by 0.2%, and the Nasdaq Composite and the Dow Jones Industrial Average lost 0.1% and 0.3%, respectively.

There's been a cautious tone in the market over the last two trading sessions as investors digest the political implications for President Trump after his former campaign manager, Paul Manafort, was convicted of tax and bank fraud and after his longtime lawyer, Michael Cohen, pleaded guilty to a range of charges, implicating Mr. Trump directly.

Meanwhile, two days worth of U.S.-China trade negations have been happening in the background. The two nations enacted a new round of tariffs on $16 billion worth of each others' goods overnight, giving investors little hope that anything material will result from this round of talks, which are scheduled to wrap up Thursday.

In addition, a Friday speech from Fed Chairman Jerome Powell at the annual Jackson Hole Symposium has given investors yet another reason to pause just a stone's throw from record territory. Mr. Powell, who has maintained a relatively low profile since taking office in early February, will take the podium at 10:00 AM ET.

10 of 11 sectors finished Thursday in negative territory, but, thankfully for the bulls, the top-weighted technology group was the lone exception. The tech space, which represents roughly a quarter of the broader market, advanced 0.2%. Within the group, chipmaker Advanced Micro (AMD 22.29, +1.39) jumped 6.7%, hitting a 12-year high, after Rosenblatt raised its target to $30 from $27.

As for the laggards, losses were pretty modest overall, with most groups shedding less than 0.5%. The financials (-0.5%), energy (-0.5%), and lightly-weighted materials (-0.7%) groups were the worst performers. However, the energy space is still up 1.8% for the week, a rebound it desperately needed after taking a 3.6% hit last week.

In earnings news, L Brands (LB 28.25, -3.64) tumbled 11.4%, hitting a seven-year low, after lower-than-expected guidance overshadowed above-consensus Q2 results. Conversely, Williams-Sonoma (WSM 72.94, +10.33) spiked 16.5% to a nearly three-year high after beating both top and bottom line estimates.

Looking at other markets, U.S. Treasuries finished flat, with the benchmark 10-yr yield closing unchanged at 2.82%. WTI crude futures also closed flat, settling at $67.84/bbl, after rallying 3.1% on Wednesday, and the U.S. Dollar Index jumped 0.6% to 95.55, putting a five-session losing streak to rest.

Reviewing Thursday's economic data, which included July New Home Sales, weekly Initial Claims, and the FHFA Housing Price Index for June:

New Home Sales in July hit an annualized rate of 627,000, which is below the Briefing.com consensus of 645,000. The June reading was revised to 638,000 (from 631,000).
The key takeaway from the report is that the average and median selling prices increased despite the slower sales pace observed in July.
The latest weekly initial jobless claims count totaled 210,000, while the Briefing.com consensus expected a reading of 217,000. Today's tally was below the unrevised prior week count of 212,000. As for continuing claims, they declined to 1.727 million from a revised count of 1.729 million (from 1.721 million).
The key takeaway from the report is that low initial claims activity remains consistent with a tight labor market.
The FHFA Housing Price Index rose 0.2% in June, and the May increase was left unrevised at 0.2%.

On Friday, investors will receive just one economic report -- July Durable Goods Orders (Briefing.com consensus -0.6%).

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