S&P 500; US Indexes Fundamental Daily Forecast – Investors Trying To Finish Month Strong

The major U.S. stock indexes are trading higher at the mid-session. Strong buying across the board is helping to drive the indexes higher in an effort to end the month on a high note that hopefully will spill over into September.

At 1613 GMT, the benchmark S&P 500 is trading 2468.73, up 11.14 or +0.45%. The blue chip Dow Jones Industrial Average is at 21933.72, up 41.29 or +0.19% and the tech-based NASDAQ Composite is trading 6420.45, up 52.14 or +0.82%.

As of Thursday’s close, the Dow was on track for a small gain in August, while the NASDAQ Composite was up about 0.3 percent. The S&P 500 Index is trading slightly lower for the month.

The strong performance into the end of August suggests there are still buyers out there. The market was very resilient this month also, bouncing back from geopolitical and political events as well as the storm in Texas that has paralyzed the Houston-area economy.

Geopolitically, investors had to deal with tension between North Korea and the U.S. Early in the month, North Korea threatened to attack U.S. territory Guam. Just this past week, North Korea fired a missile over Japan. So far the U.S. has not responded militarily, but has chosen to take the diplomatic route.

Politically, there was more turmoil in Washington as several key members of Trump’s administration resigned. Trump also called into question the loyalty of House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell after they failed to get the ball-rolling on tax reform legislation.

Traders didn’t show much reaction to today’s mixed economic reports.

On the bearish side, the Challenger Job Cuts report surprisingly rose 5.1%, up from last month’s -37.6% reading.

The Core PCE Price Index, the Fed’s favorite inflation indicator, came in at 0.1%, the same as the estimate. This put annual inflation at 1.4%, well below the Fed’s 2.0% target. Personal Spending was below the 0.4% forecast, coming in at 0.3%.

On the plus side, Weekly Unemployment Claims were slightly lower than expected at 236K. Personal Income rose 0.4%, higher than the 0.3% estimate and Chicago PMI was slightly better than the forecast at 58.9, the same as last month’s reading.

Pending Home Sales were a big disappointment, dropping 0.8%. Traders were looking for an increase of 0.4%. Last month’s report was revised lower to 1.3%. The lack of inventory was blamed for the decline.