8/24/18 – Stocks Close Week at Record Highs

We’re firmly into the slow news portion of August. The last two weeks of August see many traders and investors take vacation and trading volumes are typically well below average. The little news we did get though, helped fuel the rally as the Fed Chairman spoke in Jackson Hole, WY stating he continues to see a strong US economy. This means we’ll likely see one more interest rate increase this year and several again next year. On the week, the Dow gained 0.5% while the S&P 500 increased 0.9%.

Most of us are familiar with the Apple App Store and the Google Play Store. What many people don’t realize is how those two stores generate significant profit for Apple and Google. Both companies charge up to 30% fees for apps, games and subscriptions sold through the sites. Netflix for example, pays a recurring 15% commission on all subscriptions created through the Netflix app. Apple and Google continue to collect that commission year after year. If consumers sign up on the Netflix website, Netflix keeps all the revenue. Netflix and others are currently trying new ways of reaching consumers to avoid paying the app store commissions. Some companies are beginning to charge higher subscription prices to consumers who sign up through the app, essentially passing the commission onto the end user. The App Store and Google Play have given developers a great way to reach consumers, but many developers are now questioning the value of the commissions. It will be interesting to see how this plays out and what Apple and Google do in response. Read More

Oil increased this week, gaining 4.1% to close at $68.56/barrel, breaking a seven week streak of declining oil prices. The yield on the 10-yr Treasury moved lower, closing at 2.82% from 2.86% last week. The average rate on a 30-yr fixed rate mortgage moved lower to 4.51%, from 4.53% last week.

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