US Stock Market Continuing to Rise

By Dale Gillham | Published 09 September 2019

In this week’s US stock market report, Dale and Jim Beach talk on his syndicated radio show in the United States about how all of the economic data is actually pointing to the US stock market continuing to rise as opposed to falling.

Labour productivity dropped by 1.40 percent in the June quarter, compared with growth of 1.44 percent the previous quarter. Historically, productivity growth data from 1949 to 2019 has averaged around 1.56 percent with its all-time high of 9.69 percent occurring in December 1950 and its all-time low of -2.69 percent occurring in March 1974.

Other important metrics showed that the US population had reached 328.24 million people in December 2018, while the unemployment rate remained steady at 3.70 percent in July. Wages growth was up a little more than expected being 0.4 percent month-on-month and was up by 3.2 percent for the year. In more good news, the labour force participation rate increased to 63.60 percent in July.

On the flip side, only 130,000 new jobs were created in August, which was below expectations, given that analysts were expecting 150,000 new jobs. This slowdown in job growth marked the third straight month it has been in decline. That said, unemployment remained steady at a rate of 3.7 percent. Although it is anticipated that innovation, such as artificial intelligence and driverless vehicles may affect productivity in the future. So, will there be less jobs as more innovation comes into play and will productivity rise or fall?

On another note, according to Goldman Sachs, corporate share buybacks are set to hit $940Bn this year which is up 13 percent on 2018, and double what it was ten years ago.

So is this a sign that companies are being short sighted and only concerned with driving shareholder value so the CEO and senior management get bigger bonus’s or are buybacks good for the longevity of the business? While share buybacks drive up stock prices, is this always good for the company or the economy?

So what happened in the US stock market last week?

The best sectors in the S&P 500 last week include Materials, which was up 3.12 percent, followed by Energy up 2.85 percent and Consumer Discretionary up 2.76 percent. The worst sectors in the S&P 500 include Communication Services, which was down 1.93 percent, followed by Utilities, which was up 1.75 percent and Industrials, which was up 1.8 percent.

As for the stocks in the top 100 on the S&P 500, the biggest winners were chip manufacturer, Intel up 7.40 percent, Nvidia Corp up 6.65 percent and GE up 5.58 percent. Those at the other end of the scale were Anthem down 4.64 percent, Salesforces down 3.2 percent and United Health down 2.12 percent.

Watch Dale as he takes you through the charts of the Dow Jones Industrial average and gives you his thoughts on where it is headed, along with answering questions from our subscribers and analyzing stocks of interest in the S&P 500.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the award winning book Accelerate Your Wealth—It’s Your Money, Your Choice.

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