U.S. and World News
- Hurricane Irma tore through Florida and the southeast last weekend, knocking out power to nearly 8 million homes and causing an estimated $25 billion in damage. In combination with Hurricane Harvey, which is expected to be one of the costliest disasters in U.S. history, the storms are likely drag 3rd quarter GDP by at least 1%.
- The North Korea saga continued this week. First the United Nations voted unanimously for fresh sanctions against North Korea which will cap oil imports and impose an embargo on the country’s textile trade. Then, for the second time in less than a month, North Korea fired a ballistic missile that flew over Japan. This prompted an emergency meeting of the UN Security Council. Also in response, Secretary of State Rex Tillerson continued to urge China to use its leverage as North Korea’s principal supplier of oil to dissuade them from further pursuing its development of nuclear weapons.
- Markets rallied this week with both the S&P 500 and Dow Jones Industrial Average closing at new All-Time Highs. The S&P rose 1.63% and closed at 2,500. The Dow Jones spiked 2.19% for the week and closed at 22,268. Year to date, the S&P is up 13.25% and the Dow is up 12.20%.
- Interest rates rebounded from last week’s declines. The 5 year and 10 year U.S. Treasury Notes are now yielding 1.80% and 2.20%, respectively.
- The spot price of WTI Crude Oil increased by 5.06% this week, closing at $49.88 per barrel. Year to date, Oil prices have fallen 7.15%.
- The spot price of Gold ended the week lower by 1.87%, closing at $1,321.38 per ounce. Year to date, Gold prices are up 15.15%.
- Initial jobless claims declined by 14,000 from last week, coming in at 284,000. The drop reflected a rebound from the effects of Hurricane Harvey, however, the effects of Hurricane Irma have not yet been included. The four week moving average for claims rose to 263,000.
- Headline CPI (measure of inflation) rose by 0.4% in August, more than expectations of 0.3%. This was largely due to a 2.8% increase in energy prices related to Hurricane Harvey. Over the last 12 months, headline CPI has risen 1.9%.
- Core CPI (excludes food and energy prices) rose 0.2% in August, in line with expectations. Over the last 12 months Core CPI has risen 1.7%.
Fact of the Week
- Only 40% of American households reporting between $100,000-$199,999 of income have investments in the stock market. The percentage of stock ownership drops to 20% of American households for those reporting between $50,000-$74,999 of income. (Source: Federal Reserve Bank of St. Louis)
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