U.S. stocks experienced broad-based decline on Thursday as President Trump’s legal woes and trade-related concerns continue to dent investors’ confidence. Market participants hesitate to invest in risky assets like equities forcing all three major stock market indexes to close in the red. Investors are also waiting for Fed Chairman Jerome Powell’s speech which is scheduled on Friday in Jackson Hole, Wyoming.
The Dow Jones Industrial Average (DJI) closed at 25,656.98, declining 0.3%. The S&P 500 Index (INX) was down 0.2% to close at 2,856.98. The Nasdaq Composite Index (IXIC) closed at 7,878.46, decreasing 0.1%. A total of 5.57 billion shares were traded on Thursday, lower than the last 20-session average of 6.35 billion shares. Decliners outnumbered advancers on the NYSE by 1.93-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.42-to-1 ratio. The CBOE VIX increased 1.3% to close at 12.41.
How Did the Benchmarks Perform?
The Dow ended in negative territory for second straight trading day with 17 components of the 30-stock blue-chip index closing in the red while 13 finished in the green. The tech-heavy Nasdaq Composite also ended in the red reversing its winning run for fifth straight trading day.
The S&P 500’s decline was led by a drop of 0.7% in Materials Select Sector SPDR (XLB) and decrease of 0.5% in both Energy Select Sector SPDR (XLE) and Financials Select Sector SPDR (XLF). Notably, 10 out of 11 sectors of the benchmark index closed in the red while one ended in the green.
Trump Warns Against a Possible Impeachment
On Aug 23, in an interview with Fox News, President Donald Trump said “If I ever got impeached, I think the market would crash.” Trump also added “I think everybody would be very poor. Because without this thinking you would see numbers that you wouldn’t believe in reverse.”
Notably, on Aug 21, Trump's former personal attorney Michael Cohen pleaded guilty in a Manhattan federal court to eight criminal cases. Major charges against him are related to tax fraud, making false statements to a financial institution, and unlawful corporate contributions.
In a separate case, Paul Manafort, former Trump campaign manager was found guilty on eight counts in the same day. These cases were related to tax fraud, bank fraud and non-filling of foreign bank account reports.
Trade War Concerns Linger
The much-hyped two-day trade related discussion between mid-level delegates of the United States and China ended with no resolution in sight. Notably, earlier this week, President Trump stated that he was not expecting any meaningful solution from this round of trade negotiations.
On Aug 23, the U.S. government officially imposed 25% tariffs worth $16 billion on Chinese imports. So far, the Trump administration has levied $50 billion of tariffs on China prompting the Asian economic superpower to retaliate with same amount of tariffs. Moreover, President Trump is considering imposing another round of tariffs worth $200 billion on Chinese goods as early as possible.
Fed Chairman’s Speech in Focus
On Aug 24, Fed Chairman Jerome Powell is scheduled to deliver a speech at the meeting of U.S. central bankers in Jackson Hole, Wyoming. Investors will closely monitor Powell’s lecture to find any clue about the Federal Reserve’s broader monetary policy. Notably, in the minutes of the Federal Reserve's meeting earlier this month, the central bank had indicated widespread support for another interest rate increase in September.
Moreover, the Fed officials have unanimously opined that escalation of global trade conflicts could hurt businesses and households. The central bank has stated that lingering global trade disputes are the biggest source of risk and uncertainty to the growing economic prosperity of the United States.
Economic Data
The Labor Department reported that the U.S. initial jobless claims have declined by 2,000 for the week ended Aug 18 to 210,000, better than the consensus estimate of 215,000. Initial jobless claims currently hovered around a 49-year low, reflecting robustness of the U.S. labor market.
The Commerce Department reported that sales of new U.S. single-family homes declined 1.7% in July to a seasonally adjusted annual rate of 627,000 units, its lowest level since October 2017. The figure was also below the consensus estimate of 644,000. The data for June was revised up to 638,000 units from the previously reported 631,000 units.
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Image: Bigstock
Stock Market News For Aug 24, 2018
U.S. stocks experienced broad-based decline on Thursday as President Trump’s legal woes and trade-related concerns continue to dent investors’ confidence. Market participants hesitate to invest in risky assets like equities forcing all three major stock market indexes to close in the red. Investors are also waiting for Fed Chairman Jerome Powell’s speech which is scheduled on Friday in Jackson Hole, Wyoming.
The Dow Jones Industrial Average (DJI) closed at 25,656.98, declining 0.3%. The S&P 500 Index (INX) was down 0.2% to close at 2,856.98. The Nasdaq Composite Index (IXIC) closed at 7,878.46, decreasing 0.1%. A total of 5.57 billion shares were traded on Thursday, lower than the last 20-session average of 6.35 billion shares. Decliners outnumbered advancers on the NYSE by 1.93-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.42-to-1 ratio. The CBOE VIX increased 1.3% to close at 12.41.
How Did the Benchmarks Perform?
The Dow ended in negative territory for second straight trading day with 17 components of the 30-stock blue-chip index closing in the red while 13 finished in the green. The tech-heavy Nasdaq Composite also ended in the red reversing its winning run for fifth straight trading day.
The S&P 500’s decline was led by a drop of 0.7% in Materials Select Sector SPDR (XLB) and decrease of 0.5% in both Energy Select Sector SPDR (XLE) and Financials Select Sector SPDR (XLF). Notably, 10 out of 11 sectors of the benchmark index closed in the red while one ended in the green.
Trump Warns Against a Possible Impeachment
On Aug 23, in an interview with Fox News, President Donald Trump said “If I ever got impeached, I think the market would crash.” Trump also added “I think everybody would be very poor. Because without this thinking you would see numbers that you wouldn’t believe in reverse.”
Notably, on Aug 21, Trump's former personal attorney Michael Cohen pleaded guilty in a Manhattan federal court to eight criminal cases. Major charges against him are related to tax fraud, making false statements to a financial institution, and unlawful corporate contributions.
In a separate case, Paul Manafort, former Trump campaign manager was found guilty on eight counts in the same day. These cases were related to tax fraud, bank fraud and non-filling of foreign bank account reports.
Trade War Concerns Linger
The much-hyped two-day trade related discussion between mid-level delegates of the United States and China ended with no resolution in sight. Notably, earlier this week, President Trump stated that he was not expecting any meaningful solution from this round of trade negotiations.
On Aug 23, the U.S. government officially imposed 25% tariffs worth $16 billion on Chinese imports. So far, the Trump administration has levied $50 billion of tariffs on China prompting the Asian economic superpower to retaliate with same amount of tariffs. Moreover, President Trump is considering imposing another round of tariffs worth $200 billion on Chinese goods as early as possible.
Fed Chairman’s Speech in Focus
On Aug 24, Fed Chairman Jerome Powell is scheduled to deliver a speech at the meeting of U.S. central bankers in Jackson Hole, Wyoming. Investors will closely monitor Powell’s lecture to find any clue about the Federal Reserve’s broader monetary policy. Notably, in the minutes of the Federal Reserve's meeting earlier this month, the central bank had indicated widespread support for another interest rate increase in September.
Moreover, the Fed officials have unanimously opined that escalation of global trade conflicts could hurt businesses and households. The central bank has stated that lingering global trade disputes are the biggest source of risk and uncertainty to the growing economic prosperity of the United States.
Economic Data
The Labor Department reported that the U.S. initial jobless claims have declined by 2,000 for the week ended Aug 18 to 210,000, better than the consensus estimate of 215,000. Initial jobless claims currently hovered around a 49-year low, reflecting robustness of the U.S. labor market.
The Commerce Department reported that sales of new U.S. single-family homes declined 1.7% in July to a seasonally adjusted annual rate of 627,000 units, its lowest level since October 2017. The figure was also below the consensus estimate of 644,000. The data for June was revised up to 638,000 units from the previously reported 631,000 units.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>