Trinity Investments Limited – Week Ahead – US Markets Outlook

HONG KONG - Aug. 26, 2018 - PRLog -- On Friday, the S&P 500 closed at a record high of 2,874.69, the benchmark index's first new record since the January 26, 2018 peak that preceded the two sharp market drops that shook investors over the winter months and had markets stalled out through much of the summer.

"Stock Market hit all time high on Friday. Congratulations U.S.A.!" said President Donald Trump on Twitter.

The tech-heavy Nasdaq also gained ground on Friday, rising 0.86% to pace gains for the major indexes and also secure a new record high close. The Dow added 133 points on Friday, or 0.5%, and remains about 900 points away from its record level.

This week's rise in stocks, however, came amid one of the most tumultuous weeks in office for Trump, which was capped with news that Trump Organization CFO Allen Weisselberg might be cooperating with prosecutors.

In an interview with Fox News this week, Trump went so far as to discuss his view of what would happen to markets were he to get impeached. "If I ever got impeached," he told Fox News, "I think the market would crash. I think everybody would be very poor because without this thinking, you would see numbers that you wouldn't believe."

And it is amid this kind of speculation on his own demise from the President of the United States that stocks made new records.

"Any investor can tell you that the first lesson of the stock market is that no one person is bigger than the market," said analysts at Trinity Investments on Friday.

"And that goes for billionaires (and Presidents) as well!" the firm added. "We say this in no way to downplay the positive impact of what the President has accomplished with respect to business sentiment and tax and regulatory policy during his time in office, but while any major upheaval or scandal in Washington would likely have a short-term impact, life goes on."

In the week ahead, the economics calendar will bring investors a couple of key reports, notably the second estimate of second quarter GDP. This number is expected to show the economy grew at a pace of 4% in the second quarter, a slight downgrade from the initial estimate that pegged growth at 4.1%.

Additionally, investors will get key data on inflation in the form of "core" PCE, the Fed's preferred inflation measure, which is expected to show prices rose 2.3% over the prior year in July. The final reading on consumer confidence in August from the University of Michigan will also be released on Friday morning.

And on the earnings side, the retail sector will remain in focus with Best Buy, Tiffany, PVH, Kroger, Dollar General, Dollar Tree, and Ulta Beauty all set to release earnings.

Other S&P 500 members scheduled to report earnings this week include salesforce.com, H&R Block, and HP Enterprise.

And while it seems the news flow these days takes few weeks off, the coming week is likely to be one of the lowest of the year for trading volumes as it serves as the unofficial last week of summer ahead of the Labor Day holiday in the U.S.

Economic calendar

• Monday: Dallas Fed manufacturing activity, August (30 expected; 32.3 previously)
• Tuesday: Case-Shiller home price index, June (+0.2% expected; +0.2% previously); Richmond Fed manufacturing index, August (18 expected; 20 previously); Conference Board consumer confidence index, August (126.5 expected; 127.4 previously)
• Wednesday: Second quarter GDP, second estimate (+4% annualized pace of growth expected; +4.1% previously); Pending home sales, July (+0.5% expected; +0.9% previously)
• Thursday: Personal income, July (+0.4% expected; +0.4% previously); Personal spending, July (+0.4% expected; +0.4% previously); "Core" PCE, year-on-year, July (+2.3% expected; +2.2% previously); Initial jobless claims (215,000 expected; 210,000 previously)
• Friday: Chicago PMI, August (63 expected; 65.5 previously); University of Michigan consumer sentiment, August (95.5 expected; 95.3 previously)

Whilst the markets have appeared to ignore the latest issues surrounding President Trump, Trinity Investments still advises caution when entering an investment that has ties to China and the US. Insulation is certainly there over the past few weeks, how long it will last and whether the markets have already accounted for this is yet to be fully understood.

To find out more, visit www.trinity-investments.com  or email us at info@trinity-investments.com and we will happily get back to you.