Weekly Market Recap – August 4, 2023
Major U.S. stock indexes began the week on a weak note, recovered somewhat after Friday’s jobs report, but ultimately closed the day in the red. The Dow registered a weekly decline of about 1%, while the S&P 500 and NASDAQ experienced a weekly loss exceeding 2%.
The U.S. jobs market saw 187,000 new jobs in July. This was below the estimated 200,000 but consistent with June’s revised increase of 185,000. The unemployment rate dropped to 3.5%, hovering close to its lowest point in 50 years.
So far, 84% of S&P 500 companies have disclosed their Q2 2023 earnings. Out of the companies that announced second-quarter results by Friday, 79% surpassed net income expectations, beating the five-year average of 77%, as stated by FactSet. Overall, there’s an anticipated 5.7% earnings drop compared to the previous year, marking the largest decline in the index since the third quarter of 2020.
In an unforeseen move, the ratings agency Fitch downgraded the U.S. credit rating on Tuesday from AAA to AA+. The decision was based on the recent deadlock over the debt ceiling and fears about escalating federal debt, resulting in what was described as an “erosion of governance.”
Oil prices saw an increase on Thursday, following the announcement that Saudi Arabia’s voluntary production cuts would continue until September or even later. Although oil prices had dropped earlier in the week, they recovered due to concerns over supply, ending the week above $80 per barrel.
A Consumer Price Index (CPI) report due to be released this coming Thursday will reveal if the recent easing in inflation persisted through July. The last CPI report for June indicated that annual inflation slowed to 3.0%, marking the lowest rate since March 2021 and a steep decline from the 40-year high of 9.1% observed in June 2022.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| Chicago Business Barometer | July | 42.8 | 41.5 |
| S&P final U.S. manufacturing PMI | July | 49.0 | 49.0 |
| Job openings | June | 9.58 million | 9.62 million |
| ISM manufacturing | July | 46.4% | 46.0% |
| Construction spending | June | 0.5% | 1.1% |
| ADP employment | July | 324,000 | 455,000 |
| Initial jobless claims | July 29 | 227,000 | 221,000 |
| U.S. productivity (prelim) | Q2 | 3.7% | -1.3% |
| S&P final U.S. services PMI | July | 52.3 | 52.4 |
| ISM services | July | 52.7% | 53.9% |
| Factory orders | June | 2.3% | 0.4% |
| U.S. nonfarm payrolls | July | 187,000 | 185,000 |
| U.S. unemployment rate | July | 3.5% | 3.6% |
| U.S. hourly wages | July | 0.4% | 0.4% |
| Hourly wages year over year | 4.4% | 4.4% |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 35,065.62 |
| Nasdaq Composite | 13,909.24 |
| S&P 500 Index | 4,478.03 |
| CBOE Volatility Index | 17.10 |
| S&P GSCI | 591.68 |
| U.S. Dollar Index | 102.017 |
| 10-Year T-Note (Sep ’23) | 111-045 |
| Crude Oil WTI (Sep ’23) | 82.82 |
| Natural Gas (Sep ’23) | 2.577 |
| Gold (Dec ’23) | 1,976.1 |
| Silver (Sep ’23) | 23.716 |
| Corn (Dec ’23) | 497-2 |
| Wheat (Sep ’23) | 633-0 |
| Soybean (Nov ’23) | 1333-2 |
| Coffee (Sep ’23) | 161.35 |
| Sugar #11 (Oct ’23) | 23.69 |
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