Weekly Market Recap – August 18, 2023
Major U.S. stock indices plummeted over 2%, marking the third straight weekly loss for both the S&P 500 and NASDAQ. This slump followed a three-week surge that ceased in late July.
Recently released minutes from the Fed’s meeting and new economic statistics suggest that interest rates might persist at elevated levels for a longer duration than anticipated earlier. The 10-year U.S. Treasury bond’s yield briefly touched 4.32% on Thursday, a peak not seen since November 2007, but pulled back slightly to about 4.25% by week’s end.
Asia felt the pressure from intensifying economic issues and worries about China’s real estate sector debt. Consequently, the Hang Seng, a Hong Kong stock index, plunged into a bear market on Friday, reflecting a decline of over 20% from its recent peak. Earlier, China’s central bank lowered its key interest rates for the second time in a three-month span.
Wednesday’s release of the U.S. Federal Reserve’s July meeting minutes highlighted a split among policymakers. While some expressed concerns about the potential economic hazards of excessive rate hikes, others emphasized the ongoing threat of inflation, indicating more rate hikes might be on the horizon.
The U.S. retail sales data for July surpassed many analysts’ projections. The report showcased a 0.7% monthly increase, beating the expected rise of roughly 0.4%. Positive growth was seen in 9 out of 13 retail sectors.
U.S. crude oil prices declined by 2% this week, ending at about $81 per barrel. This breaks its positive trajectory lasting seven weeks, considering it was priced below $70 per barrel before this upward trend.
The financial community is now setting its sights on Jackson Hole, Wyoming. The U.S. Federal Reserve’s annual economic policy conference will commence there on Thursday, August 24. The event will feature key speakers, including the Fed Chair, Jerome Powell.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| U.S. retail sales | July | 0.7% | 0.3% |
| Retail sales minus autos | July | 1.0% | 0.2% |
| Import price index | July | 0.4% | -0.1% |
| Import price index minus fuel | July | 0.0% | -0.3% |
| Empire State manufacturing survey | Aug | -1.9 | 1.1 |
| Business inventories | June | 0.0% | 0.0% |
| NAHB builders confidence index | Aug | 50 | 56 |
| Housing starts | July | 1.45 million | 1.40 million |
| Building permits | July | 1.44 million | 1.44 million |
| Industrial production | July | 1.0% | -0.8% |
| Capacity utilization | July | 79.3% | 76.8% |
| Initial jobless claims | Aug. 12 | 239,000 | 250,000 |
| Philadelphia Fed manufacturing survey | Aug | 12 | -13.5 |
| U.S. leading economic indicators | July | 0.4% | -0.7% |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 34,500.66 |
| Nasdaq Composite | 13,290.78 |
| S&P 500 Index | 4,369.71 |
| CBOE Volatility Index | 17.30 |
| S&P GSCI | 582.03 |
| U.S. Dollar Index | 103.375 |
| 10-Year T-Note (Sep ’23) | 109-205 |
| Crude Oil WTI (Oct ’23) | 80.66 |
| Natural Gas (Sep ’23) | 2.551 |
| Gold (Dec ’23) | 1,916.5 |
| Silver (Sep ’23) | 22.733 |
| Corn (Dec ’23) | 493-0 |
| Wheat (Dec ’23) | 639-0 |
| Soybean (Nov ’23) | 1353-2 |
| Coffee (Dec ’23) | 150.00 |
| Sugar #11 (Oct ’23) | 23.76 |
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