TRADING WEEK ENDING August 4, 2017

The Week's U.S. Economic Calendar

Select Positive Data Reports

  • Nonfarm Payrolls
    • (209k versus survey of 180k and prior of 231k)
  • Average Hourly Earnings YoY
    • (+2.5% versus survey of +2.4% and prior of +2.5%)

Select Negative Data Reports

  • ISM Manufacturing
    • (56.3 versus survey of 56.5 and prior of 57.8)
  • ISM Non-Manufacturing
    • (53.9 versus survey of 56.9 and prior of 57.4)

Market Comments

  • Large cap U.S. stocks (S&P 500) posted a weekly gain as a result of better than expected corporate earnings results and a strong jobs report. Small cap equities (Russell 2000) lagged their large cap counterparts, falling -1.2% on the week.
  • Seven of the eleven sectors were negative for the week, highlighted by Energy (-1.0%), Materials (-0.8% ) and Consumer Staples (-0.6%). Financials (+1.9%) and Utilities (+1.5%) were the largest contributors.
  • Developed international equities (MSCI EAFE) advanced +0.9%, led by strong returns in France and the United Kingdom. Emerging market equities (MSCI EM) gained +0.4% for the week, as strong gains from Taiwan and China boosted index performance.
  • Yield oriented equities posted mixed returns on the week with MLPs and REITs generating nominal returns of -1.4% and -0.1%, respectively, while the aforementioned Utilities advanced +1.5%. The 10-Year Treasury posted a weekly return of +0.2%, as long-end rates fell to 2.27%.

In The News

  • The Dow Jones Industrial Average hit 22,000, the highest level in its history, sparked by broad global growth. The index of the largest 30 U.S. companies has posted 33 record closes this year and has not seen a pullback of over -3% in more than 12 months as equity volatility hovers near all-time lows.
  • A reason for the record stock levels has to do with earnings. Companies comprising the S&P 500 have experienced two consecutive quarters of double-digit earnings growth for the first time since 2011. The upswing in earnings can be seen across most sectors as only utilities are expected to experience a decline.
  • The Trump administration is planning to use a little used provision in U.S. trade law to investigate China’s intellectual-property policies in order to reveal if they are “unfair business practices” that disadvantage the U.S. There have been strong concerns by many U.S. business groups over the years that the Chinese have stolen intellectual property from U.S. and foreign companies.

Performance Data as of August 4, 2017

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General Performance Information
The performance results in this presentation have been complied by Tolleson Wealth Management (“TWM”). Past performance is no guarantee of future results. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. All investments involve risk, including the loss of principal. This information discusses general market activity, industry or sector trends, or other broad-based economic market or political conditions and should not be construed as research or investment advice. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Opinions expressed are current opinions as of the original publication date appearing in this material only. Any opinions expressed are subject to change without notice and TWM is under no obligation to update the information contained herein. TWM disclaims responsibility for the accuracy or completeness of this report although reasonable care has been taken to assure the accuracy of the data contained herein. This material has been prepared and is distributed solely for informational purposes only and is not a solicitation or an offer to buy a security or instrument or to participate in any trading strategy. This report may not be reproduced, distributed or transmitted, in whole or part, by any means, without written permission from TWM. If you have any questions regarding this presentation, please contact your TWM representative.

Index Disclosure
The returns and volatility of the indices displayed may be materially different than the client’s account, and a client’s holdings may differ significantly from the securities that comprise the indices. The indices are disclosed to allow for comparisons to well-known and widely recognized indices, and may or may not be appropriate for performance comparisons. An investor cannot invest directly in the index.