Market Outlook – August 24, 2018

Main U.S. Benchmarks Slide

 

With all three main benchmarks sliding, U.S. stocks closed lower Thursday. Some analysts cite a typical late-summer session which is typified by low trading volumes. The S&P 500 index lost 4.84 points 0.17% with 10 of its 11 primary sectors falling. Only the tech stocks managed to advance.

The Dow Jones Industrial Average dropped 76.62 points (-0.30%) while the Nasdaq Composite Index shed 10.64 points (-0.13%). For the week, the S&P 500 is on track to climb 0.2% and the Nasdaq is on pace to rise 0.8%. The Dow Jones is seen to remain flat.

Feds to Raise Interest Rates in September

 

Investors are sure the central bank will raise interest rates in September. The minutes of the Fed’s latest meeting indicated broad-based support for the move. Many of officials argue that as long as economic data remain strong, “it would likely soon be appropriate to take another step in removing policy accommodation.”

Fed Chairman Jerome Powell be the guest speaker on Friday at the central bank’s annual meeting in Jackson Hole, Wyo. Observers believe his speech will not differ in tone or message from the released minutes. Investors are hoping it could provide more clarity. Powell sees some troubled areas that would be roadblocks to the economy going forward.

U.S.-China Trade Talks Concludes with No Breakthrough

 

The two-day meeting of mid-level officials from the U.S. and China ended on Thursday with no major breakthrough. It was actually a resumption of the trade talks.

White House spokeswoman Lindsay Walters said in a brief emailed statement “We concluded two days of discussions with counterparts from China and exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship.” The discussions included “addressing structural issues in China,” She added that the discussions also covered the issue of intellectual property and technology transfer policies.

Meanwhile, the trade war escalated with the activation of another round of punitive tariffs on $16 billion worth of each country’s goods. The meeting went out even if the latest 25% tariffs were implemented on Thursday.

Tech Giants to Hold Summit on Security Issues

 

The tech giants are  preparing for the upcoming 2018 U.S. elections. Representatives from the top U.S. tech companies will meet on Friday in San Francisco. The discussions during the tech summit will center security issues now that the 2018 elections are a few months away.

Buzzfeed reported that Nathaniel Gleicher, Facebook Inc.’s (FB) head of cybersecurity policy invited representatives from Alphabet Inc. (GOOGL), Microsoft Corp. (MSFT) and other tech companies.

SEC Staff Rejects Bitcoin-Based ETF Applications

 

On Wednesday, an SEC staff rejected the applications of 9 bitcoin-based exchange-traded funds. The said SEC staff had a delegated authority to do so. The same staff is not yet convinced that the products would not be subject to fraud or manipulation. But four SEC commissioners said on Thursday that it will review the decision by its staff to block the said bitcoin-based ETFs.

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