Bulls appeared somewhat lackluster this week after concerns over renewed weakness for tech stocks left Wall Street acting with caution. Nonetheless, steady production growth supported by an active labor market continued, and American manufacturers turned in another solid performance in the last month that kept the equities market mostly content.
However, besides the seventh consecutive day of a bullish run that helped the Dow fly to a record high – above the 22,000 mark – stocks mostly traded with mixed sentiments this week. Dividend payments have stalled for the last few months, which seems to be increasingly affecting consumer spending, but a surging service industry saved the day.
The American economy has been benefiting from robust profits from large enterprises and low-interest rates, but this week’s retreat into tech stocks remind us how fragile things could turn out to be. The regulatory uncertainties introduced by this administration continue to question the growth potential of the highly innovative segment of the economy.
Furthermore, the lack of leadership from the White House amid increasing threats from North Korea accentuated the political drama in Washington. Especially after the hiring-and-firing saga that accelerated with the latest victim being Anthony Scaramucci, the carnival of crazy lingered and helped to drive market sentiments.
Be sure to check out our previous week’s edition here, in which traders were focused on the Fed’s interest rate guidance.