CNBC EVENING BRIEF
The U.S. consumer came to the market’s rescue Thursday. Walmart’s earnings and solid retail sales figures led investors to believe strong consumers could keep the country out of a recession.
In addition to economic data, Wall Street has been sifting through competing factors this summer to decide whether or not the historic bull market still has legs. We’ve had the Federal Reserve cutting rates, tariff escalation (or de-escalation, depending on the day) and currency fluctuations, to name a few. Of those, the S&P reacts most dramatically to news of more tariffs, as the chart below shows.
Senior White House officials also seem to be playing the blame game when it comes to which factor is causing the market’s August turmoil. All but two — President Donald Trump and economic advisor Peter Navarro — see the trade war as driving the economic slowdown, administration officials told CNBC’s Kayla Tausche.
The president and Navarro are choosing to blame Federal Reserve Chair Jerome Powell, instead. Trump has criticized his central bank chief sharply but went a step further in recent days, labeling the Fed leader “clueless Jay Powell.”
Regardless of what’s causing it, volatility is back. The volatility index, Wall Street’s so-called fear index, has risen about 50% this month. Its daily average range is about 482 points, which is more than double the average daily range from the rest of the year.
CNBC used Kensho, a hedge fund analytics tool, to track the top ETF performers the week after the volatility index popped above 15. It found that the Utilities Select Sector SPDR Fund, which holds stocks like Duke Energy and Southern Company, has the biggest returns following bursts of uncertainty.
