S&P 500 Rises As Turkey Concerns Offset By Improved Trade Deal Prospects, Earnings

The doldrums of summer are here, which perhaps explains why investor reaction to geopolitical news would seem to be the only thing really moving the needle for the S&P 500 in the third week of August 2018.

After last week’s concerns over the risk of contagion from Turkey’s economic dilemmas began to be offset by a double dose of good news in the form of improved prospects for U.S.-China and U.S.-Mexico trade negotiations. But what really seems to have moved the needle during Week 3 of August 2018 was the solid earnings results that came out from both Walmart (NYSE: WMT) and Cisco (NASDAQ: CSCO) on Thursday, 16 August 2018.

That said, this being the doldrums of summer, there wasn’t a whole lot of major market-moving news in the week that was.

Monday, 13 August 2018

• Oil edges lower as Cushing build adds to demand fears
• Wall Street dragged down by fall out from Turkey’s plunging lira

• U.S. bank shares fall on Turkey contagion fears

Tuesday, 14 August 2018

• Oil slips as strong dollar pressures, equities gains support
• Wall St. rises on earnings optimism, lira rebound

Wednesday, 15 August 2018

• Oil falls as U.S. crude inventories jump unexpectedly

• Chinese oil importers shun U.S. crude despite tariff reversal

Turkey, trade worries hit Wall Street

• Turkey tantrum? Investors fret over contagion from lira plunge

Thursday, 16 August 2018

• Oil steadies but outlook for demand grows gloomy
• QE lives! U.S. Fed buys $1.8 billion of mortgage bonds, sells none
• Wall St. rallies on solid earnings, U.S.-China trade talks

Friday, 17 August 2018

• Oil rises in session, but has weekly loss on trade worries
• Wall Street rises on upbeat trade news

• U.S., China Plot Road Map to Resolve Trade Dispute by November
• Canada on the Sidelines as U.S. and Mexico Near an Agreement on Nafta

For the second week in a row, Barry Ritholtz identified more negatives than positives in the week’s economics and markets news.

The good news is that the S&P 500 is continuing to track along with our redzone forecast, where in a week where there really wasn’t much going on, stock prices behaved as expected.