September 16, 2020

More solid economic news kept the U.S. equity markets rolling yesterday, with broad-based gains in many sectors of the market.  Technology posted another solid gain, along with gains in real estate, materials, industrials and health care.  Although the Dow lost steam at the end of yesterday’s trading, it eked out a gain of 2.27 points, or 0.01%, while the S&P 500 gained 17.66 points, or 0.52%.  The NASDAQ added 133.67 points, or 1.21%.

Economists polled by Dow Jones expected the Empire State Manufacturing Index to come in at 7, expecting a rebound from 3.7 posted in August.  The index surged to 17 in September, indicating a much bigger rebound from the August low.

U.S. Retail Sales for August came in this morning increasing 0.6%, while economists expected 1%.  Ex-autos, retail sales gained 0.7% with 0.9% expected.  Why the decline in spending?  The consumer had extra money in their pockets through the end of July, when retail sales surged 1.2%.  With less money from federal unemployment benefits, the consumer held back spending in August.

Market futures in the pre-market indicate a solid start to today’s trading.  Investors are waiting for the Federal Reserves first policy statement and updated economic projections under its new flexible target strategy, which allows the Fed to let inflation run above 2% annually, and calls for interest rates to remain lower for a longer period of time.  The Federal Open Market Committee (FOMC) will release its policy statement at 11am PDT, with Chairman Powell giving a press conference 30 minutes later.