Rover's Weekly Market Brief —9/28/2018

New Features Added to Stock Rover

Check out our new blog post describing three cool features that were just added to Stock Rover that we think you will love. The new features are available to all Stock Rover users, both free and paid subscribers. Read more here…

Economy

The Federal Open Market Committee (FOMC) maintained their economic assessment of a strengthening labor market and a strong rate of economic activity from their August meeting and voted unanimously to raise the prime rate by 25 basis points to a range of 2.0% – 2.25%. The FOMC also updated their June economic projections, with the median estimates increasing 2018 GDP from 2.8% to 3.1%, and 2019 from 2.4% to 2.5%, and raising the 2018 unemployment rate from 3.6% to 3.7%. Their estimates for future prime rate increases were unchanged, with one more 0.25% raise slated for 2018, three increases for 2019, and one increase for 2020, bringing the prime rate to 3.25% – 3.5%, but eventually dropping to a longer run rate of 3.0% (+0.1% from June’s 2.9% forecast).

In the third estimate of 2018 Q2 GDP upward revisions to most GDP components and a slight downward revision to imports were balanced by a downward revision to private inventory investment, leaving GDP unchanged at 4.2%. The average of real GDP and real GDI (gross domestic income), a supplemental economic measure, was revised downward by -0.1% to 2.9% due to a -0.2% drop in the real GDI estimate to 1.6%. Both the overall gross domestic purchases and personal consumption price indexes were revised upwards by +0.1% to 2.4% and 2.0%, respectively. Compared to theirinitial estimate, corporate profits from current production were revised downward from $72.4 billion to $65 billion, with significant downward revisions to profits for domestic nonfinancial corporations (-$10.6 billion to $53 billion), and rest-of-the-world profits were revised from a -$8.0 billion decrease to a $4.5 billion decrease.

In August, wages and salaries rose +0.5% and rental income was up +0.8%, helping to boost personal income up by +0.3% for the month and +2.9% for the year. Personal consumption expenditures (PCE) were up +0.3%, slowing from July’s +0.4% rise, and were up +3.0% vs August 2017, with yearly increases of +6.4% for durable goods, +3.3% for nondurable goods, and +2.5% for services. PCE inflation was relatively unchanged from the previous month, with a +0.1% monthly gain and a -0.1% drop in the yearly rate to 2.2%, while core inflation, which excludes food and energy, remained at the FOMC’s target 2.0% yearly rate. The personal saving rate remained steady at 6.6%, down from a high of 7.4% in February, and the lowest rate since 6.2% in December 2017.

Upcoming Economic Reports:

Friday October 5 – Employment Situation

Friday October 5 – International Trade

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Stitch Fix (SFIX)	PepsiCo (PEP)	Lennar (LEN)	Costco Wholesale (COST)	Village Super Markets (VLGEA)
Cal-Maine Foods (CALM)	Paychex (PAYX)	RPM International (RPM)	Constellation Brands (STZ)	Pure Cycle (PCYO)