The S&P 500 index closed out the trading day little changed on Tuesday, with a rally in energy and industrial shares countering a drop in the technology and real estate sectors as investors favored value over growth.
Industrials pulled the blue-chip Dow Jones Industrial Average slightly higher and led the bellwether S&P 500’s nominal advance, while the tech-heavy Nasdaq posted its third straight decline.
China’s producer price index fell last month at fastest rate of decline in three years, hit by Beijing’s trade war with Washington.
China is expected to buy more agricultural products to position itself for a better trade deal, according to a report from the South China Morning Post.
The underwhelming data from China weighed on tariff-sensitive technology stocks, whose index fell 0.5%
Investors expect the Fed and the European Central Bank to cut rates to bolster the global economy. Germany’s finance minister suggested the nation was prepared to fight a possible recession with a stimulus package.
The news from Germany, along with easing U.S.-China tensions sent Treasury yields to four-week highs, tracking German bonds. As a result, the Interest rate-sensitive real estate stock index fell 1.4% .
Apple edged up 1.2% after announcing the Nov. 1 launch date for its streaming service Apple TV+ and unveiled its latest iPhone and Watch updates.
Wendy’s fell 10.2 after the fast food chain projected a drop in full-year 2019 adjusted earnings. Wendy’s rival McDonald’s announced it would buy Silicon Valley start-up Apprente, a startup building conversational agent that can automate voice-based ordering in multiple languages. McDonald’s shares fell 3.5% making it the largest drag on the Dow.
Ford’s shares fell 1.3% after Moody’s downgraded the automaker’s bond rating to junk.
Mallinckrodt, beset by opioid litigation uncertainties, announced it would sell BioVectra Inc to private equity firm H.I.G. Capital for up to $250 million, sending the company’s shares up 84.8%.
Francesca’s Holdings rose 101.6% after the specialty retailer posted better-than-expected second quarter results.
Approximately 8.05 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.86 billion share average over the past 20 trading days.
Quality of Life Stalls
The share of our population without health insurance rose for the first time in a decade last year, while household income hardly budged, according to a government report on Tuesday.
In a closely watched annual release of survey data detailing healthcare and economic trends in 2018, the Census Bureau painted a mixed picture of how households fared in a time of strong economic growth and low unemployment.
Earnings grew a solid 3.4%, the percentage of people in poverty fell to 11.8% last year from 12.3% in 2017, and women saw strong employment gains.
However, growth in household income, which includes earnings and all other sources of cash, largely stalled after three years of steady growth. Census officials said they could not readily identify the cause.
In addition, about 27.5 million residents, or 8.5% of our population, did not have health insurance in 2018, an increase of almost 2 million from the year before when 7.9% of people lacked coverage, the Census Bureau said.
It was the first year-to-year increase in the percentage of uninsured people since the Great Recession, Census officials said, and reverses the steady expansion of coverage since the Affordable Care Act took effect in 2014.
Some of the largest jumps in the uninsured occurred among Hispanic children, among middle-class families with incomes well above the poverty line, and in electoral battlegrounds like Michigan and Ohio. The number of uninsured in those states rose by 25,000 and 58,000, respectively.
A 0.7 percentage point drop in those covered by Medicaid, the United States’ publicly funded health program for the poor, drove the national decline in health insurance coverage.
“The decline in public coverage certainly contributed” to the overall fall in those covered by any type of health insurance, said Laryssa Mykyta, chief of the Health and Disability Statistics branch at the Census Bureau, in a conference call with reporters.
Coverage under private plans showed a decline, but it was not considered statistically significant given the survey’s margin of error.
“For children we saw a similar pattern where there was a decline in public coverage and no statistical change in private coverage,” she said.
Along with Michigan and Ohio, the other states where healthcare coverage declined included Texas, Arizona, Idaho, Tennessee and Alabama.
The Census Bureau said that the median U.S. household income was $63,179 in 2018, not statistically different from the $62,626 registered in 2017 despite reflecting a year in which our economic growth was increased due to the tax overhaul and a rise in government spending.
By the end of 2018 the unemployment rate had fallen to 3.9% and has since declined further in what is now the longest U.S. economic expansion in history. Yet, the benefits seem to have centered in the country’s metropolitan areas, which are more likely to vote Democratic.
According to regional data released by the Census, median household income inside major U.S. cities grew by a statistically significant 5.4%. Outside those urban areas, in the rural and suburban regions household income barely changed.