Indexes Define Investors – by Justin Vaughn, Editor, Options Trading Report)

Stocks finished last week on a high note, after coming off a negative last week of July. The ‘high-flying’ tech heavy Nasdaq Composite hit record highs all week, adding 3.9% for the week, while the S&P 500 added 2.4%, and the ‘steady-eddy’ Dow Jones Industrial Average added 1.5%. Chief economist Brian Jacobson of Annex Wealth Management commented on the status of the economy and tariff implications: “We can’t ignore the possibility that peak uncertainty around trade and tariffs corresponded with a trough in economic activity. In other words, maybe the worst is behind us instead of in front of us.” Investors and traders are strongly betting the Fed will indeed cut rates in the upcoming September meeting. Bonds were soft all week: the 10-year Treasury note yield crept higher, finishing at 4.282%. Gold futures were significantly higher on the Swiss exchange as tariffs of 39% could include the precious metal. President Trump commented late Friday that he would be clarifying ‘misinformation about gold tariffs.

On Monday President Trump loosened his stance on gold, deciding not to impose tariffs on the shinny metal. Gold jumped immediately, settling in the $3,350 range, after hovering in the $3,200 area for several days. On Monday President Trump extended China’s Tariff deadline another 90 days as it was set to expire Tuesday the 12th. Corporate earnings reports continued to come in mostly stronger than expected giving indexes a continued boost. Stocks floundered for the better part of the day Monday with the S&P 500 and Nasdaq both shedding 0.3%. Market expectations are high that the Fed will cut rates in September with an 87% probability according to CME Group Data. The 10-year Treasury yield closed Monday at 4.2% according to TradeWed. Bitcoin remained strong, trending in the $119,000 range while Ethereum traded near $4,600.

Good news on the inflation front, as consumer prices remained stable at 2.7%, slightly better than expected 2.8%, and the same as the previous month. Stocks perked up, with the Dow Jones Industrial Average up 484 points while both the S&P 500 and Nasdaq were hitting new records…again… Financials and airlines led the market swing upward. Investors were upbeat Wednesday as the Dow Jones spurted up 484 points, nearly touching a new high, while the S&P 500 and Nasdaq also powered to new highs. The better-than-expected inflation number was a help for the market. The Russell 2000 Index composed of smaller value stocks was up 2%, as investors pivoted into the exchange. Bitcoin hit a record of $122,808 according to Dow Jones Market Data.

Cruising with Jamie… JP Morgan Chases’ Jamie Dimon’s road show. This year the itinerary includes traveling the southern states of Georgia, Mississippi, Alabama, North Carolina, and South Carolina. Starting in 2011 JP Morgan Chase’s CEO, instituted the annual tour, stopping at as many Chase banks and possible new locations also. Many branch and full service banks are closing, not offering full service in many towns and under performing locations. PNC, Bank of America, and Wells Fargo, to name a few, are scurrying to close, downsize and eliminate small town banking… not Jami Dimon, just the opposite. Mr. Dimon is looking for ways to regenerate and develop new sites for business. “Even though we’re starting very small in some cities, we’re almost everywhere,” Jamie remarked. With nearly 5,000 branch locations already, Chase has aggressive plans to open hundreds more in many cities without a single bank after many have exited. The acquisition of Washington Mutual heavily situated on the west coast with 2,300 branches, where no Chase branches existed, has given Chase a strong foothold with strong potential growth. In the Washington D.C. area “Chase went from having no presence in 2017 to 84 branches this year, a phenomenal growth record. Dimon saw great growth possibilities and initiated the “Make Momentum Happen” tour with some of the most successful growth ever achieved. “I have never been to a place anywhere in this country or the world, where just showing up isn’t a sign of respect.”

RUMBLINGS ON THE STREET

Adam Levine, TECH WRITER, Barron’s – “from an onshoring perspective, tariff exemptions could backfire if companies such as Apple, Nvidia, and AMD start to balk at paying more for U.S.-made components.”

Jack Ablin, Chief Investment Strategist, Cresset, Barron’s – “Continued dollar weakness could undermine our position as a financial superpower.”

Tonantzin Carmona, Brookings Institution Fellow, Barron’s – “Crypto is sold as the future, but the policies backing it are in many ways taking us back to the past. We’re embedding something that is poorly understood into our financial system.”