Good gains at Wall Street

The S&P 500 and the Dow finished at record highs

U.S. stocks closed higher on Friday, 17 September 2017 with technology, financials, and telecommunication shares leading the way higher. Friday's uptick was surprising considering that it came on the heels of yet another North Korean missile launch, which crossed over the northern Japanese island of Hokkaido.

The Dow Jones Industrial Average rose 64.86 points, or 0.3%, to 22,268.34. The S&P 500 index gained 4.61 points to 2,500.23, up 0.2%. The Nasdaq Composite Index rose 19.38 points, or 0.3%, to 6,448.47. The S&P 500 and the Dow finished at records, while the Nasdaq Composite missed its all-time high by about 12 points. For the week, the Dow rose 2.2%, the S&P advanced 1.6%, and the Nasdaq climbed 1.4%.

Eight of the eleven sectors advanced on Friday, with the lightly-weighted telecom services group leading the charge.

Economic report at Wall Street showed that August retail sales decreased 0.2%, missing the consensus estimate, which called for an increase of 0.1%. The prior month's reading was revised to +0.3% from +0.6%. Excluding autos, retail sales increased 0.2% while the consensus expected an increase of 0.5%. The prior month's reading was revised to +0.4% from +0.5%. The key takeaway from the report is that it will temper forecasts for Q3 consumer spending as core retail sales, which exclude auto, gasoline station, building equipment and materials, and food services and drinking places sales, declined 0.2%. Also, Industrial Production decreased 0.9% in August (consensus +0.2%) while Capacity Utilization declined to 76.1% (consensus 76.8%) from a revised reading of 76.9% in July (from 76.7%). The key takeaway from the report is that industrial production, excluding the hurricane impact, was still weak in August.

The preliminary reading of the University of Michigan Consumer Sentiment Index for September declined to 95.3 (consensus 95.5) from 96.8 in August. The key takeaway from the report is that consumers' assessment of their financial situation is the best it has been in more than a decade. The Empire Manufacturing Survey for September declined to 24.4 from the prior month's reading of 25.2. The consensus estimate was pegged at 20.0. Business Inventories rose 0.2% in July, which is in line with the consensus. The prior month's reading was left unrevised at +0.5%. The key takeaway from the report is that pricing power will still be hard to come by given the elevated inventory-to-sales ratio, which held steady at 1.38 (down from 1.40 a year ago).

In the coming week, investors will be looking to the latest economic data ahead of the two-day U.S. Federal Reserve monetary policy meeting that ends on Wednesday. Policy makers have been concerned about weak inflation readings in recent months, which has raised doubts that the central bank will hike rates again this year. However, certain Fed members have insisted they want policy to be a step ahead of inflation. The Fed raised interest rates twice this year in response to steady growth and falling unemployment. Higher rates boost the dollar, in which gold is priced. A rising interest-rate climate tends to dull the appeal of nonyielding bullion.

Bullion prices ended substantially lower at Comex on Friday, 15 September 2017. Gold futures ended at a September low, as record highs for key U.S. stock market indexes lured investors away from the precious metal, contributing to a weekly loss of nearly 2%. Gold for December delivery fell $4.10, or 0.3%, to settle at $1,325.20 an ounce. The metal was headed for a weekly loss of 1.9%. December silver fell by 8.8 cents, or 0.5%, to $17.701 an ounce, with prices down about 2.3% for the week.

Crude oil prices ended unchanged on Friday, 15 Swptember 2017 for Friday's session, but marked the biggest weekly gain since late July on expectations of stronger global demand and a decline in world-wide supplies of crude last month.

October West Texas Intermediate crude on the New York Mercantile Exchange settled unchanged at $49.89 a barrel after hitting an intraday high above $50. November Brent rose 15 cents, or 0.3%, to $55.62 a barrel. WTI crude saw a 5.1% weekly rise. Brent ended about 3.4% higher for the week, with both benchmarks marking the strongest weekly gains since the week ended July 28.

The International Energy Agency reported Wednesday that global oil supply dropped in August and raised its outlook for demand this year. Baker Hughes on Friday reported that the number of active U.S. oil rigs fell for a second week in a row, by 7 to 749 rigs.

The ICE U.S. Dollar Index was down 0.3% on Friday. In the bond market, U.S. Treasuries didn't do much to relieve the huge weekly losses they carried into Friday's session. The yield on the benchmark 10-yr Treasury note finished flat at 2.20%, locking in a 14 basis point gain for the week. Meanwhile, the 2-yr yield climbed two basis points to 1.38%, extending its weekly gain to 13 basis points.

On Monday, investors will receive just one notable piece of economic data, the NAHB Housing Market Index for September which will cross the wires at 10:00 ET.

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