Markets Post Losses with Techs Leading the Way…..

U.S. equities finished out the session with losses, as the Information Technology sector was again the main catalyst downward to extend yesterday’s slide, and despite some upbeat readings on leading indicators and consumer sentiment. Heightened tensions between the U.S. and China didn’t help matters, after the U.S. announced plans to ban activity with Chinese mobile apps TikTok and WeChat beginning on Sunday. Continued drama in Washington added to the mix, amid the looming highly-contentious presidential election and a non-existent fiscal relief package. Treasury yields were slightly higher as bond prices dipped and the U.S. dollar was little changed, while crude oil prices inched higher and gold gained modest ground. Equity news remained light, as Texas Instruments announced an increase of its quarterly dividend and Nucor offering favorable guidance. Europe finished mostly lower with travel and leisure stocks seeing pressure amid ramped up COVID-19 concerns as new cases rise in parts of the region, while markets in Asia were mixed.

The Dow Jones Industrial Average fell 245 points (0.9%) to 27,657, the S&P 500 Index lost 38 points (1.1%) to 3,319, and the Nasdaq Composite decreased 117 points (1.1%) to 10,793. In very heavy volume as a result of quadruple witching—the simultaneous expiration of equity and index options and futures contracts—3.2 billion shares were traded on the NYSE and 5.6 billion shares changed hands on the Nasdaq. WTI crude oil was $0.14 higher at $41.11 per barrel and wholesale gasoline gained $0.02 to $1.24 per gallon. Elsewhere, the Bloomberg gold spot price rose $6.00 to $1,950.44 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was little changed at 92.95. Markets were mixed for the week, as the DJIA was flat, while S&P 500 and the Nasdaq Composite lost 0.6%.

Leading Index improves for fourth-straight month, consumer sentiment hits highest since March…..

The Conference Board’s Index of Leading Economic Indicators (LEI) for August rose 1.2% month-over-month (m/m), compared to the Bloomberg projection of a 1.3% gain, following July’s noticeable upward revision to a 2.0% advance. The LEI has increased for four-straight months due to solid positive contributions from jobless claims, stock prices and ISM new orders, as well as increases for average workweek and the yield curve, more than offsetting negative reads on consumer expectations, capital investment and credit.

The September preliminary University of Michigan Consumer Sentiment Index increased to 78.9 versus expectations of a slight improvement to 75.0 from August’s 74.1 reading. The index hit the highest level since March as both the current conditions and expectations portions of the survey improved m/m. The 1-year inflation forecast declined to 2.7% from August’s 3.1% rate, and the 5-10 year inflation forecast dipped to 2.6% from the prior month’s 2.7% level.

Treasuries were slightly lower, as the yield on the 2-year note ticked 1 basis point (bp) higher to 0.14%, the yield on the 10-year note was flat at 0.69%, and the 30-year bond rate gained 2 bps to 1.45%.

©2020 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.