Weekly Market Recap – October 13, 2023
The major U.S. stock indexes had a positive start to the week but turned negative on Thursday and Friday as the earnings season began. The S&P 500 and the Dow recorded slight weekly gains, while the NASDAQ experienced a minor decline.
The yields of U.S. government bonds slightly decreased as the 10-year Treasury yield ended a streak of five consecutive weekly gains. Despite this weekly retreat, the 10-year yield on Friday stood at around 4.63%, the highest since mid-2007 and significantly above the year-to-date low of 3.29% seen in early April.
Earnings season kicked into high gear on Friday when three major U.S. banks reported their third-quarter results, surpassing analysts’ net income and revenue expectations. As of Friday, analysts were predicting a slight overall increase of 0.4% in earnings for all companies in the S&P 500. This potential increase would break a streak of three consecutive quarterly earnings declines.
Thursday’s monthly U.S. Consumer Price Index report indicated minimal changes in inflation, although various categories contributing to the overall CPI figure moved in different directions. The overall annual inflation figure for September remained at 3.7%, the same as the previous month, with housing and energy costs rising while food expenses dipped.
The minutes released on Wednesday from the U.S. Federal Reserve’s September meeting revealed divisions among policymakers regarding the necessity of further interest rate increases. A majority believed that another rate hike would likely be appropriate at some point, while some argued that no further increases were warranted. The next two-day meeting of the Federal Reserve concludes on November 1.
Escalating geopolitical tensions in the Middle East and increased U.S. sanctions on Russian oil exports contributed to a weekly rise in oil prices. On Friday, U.S. crude oil was trading at nearly $88 per barrel, up from less than $83 at the end of the previous week.
The Russell 2000 Index, a U.S. small-cap stock benchmark, underperformed its larger counterparts, declining by approximately 1.5% for the week. This extended the year-to-date underperformance of small caps, leaving the Russell 2000 down about 1% in 2023. The index has fallen by roughly 14% from its year-to-date peak on July 31.
An upcoming report on U.S. retail sales, scheduled for release on Tuesday, will provide insight into whether the recent positive momentum extended into September. Despite inflationary pressures, retail sales increased by 0.6% month-over-month in August, following a 0.5% rise in July. This improvement is noteworthy considering that, as recently as March, retail sales had been trending negatively.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| NFIB optimism index | Sep | 90.8 | 91.3 |
| Wholesale inventories | Aug | -0.1% | -0.1% |
| Producer price index | Sep | 0.5% | 0.7% |
| Core PPI | Sep | 0.2% | 0.3% |
| PPI year over year | 2.2% | 1.6% | |
| Core PPI year over year | 2.8% | 3.0% | |
| Initial jobless claims | Oct 7 | 209.000 | 207.000 |
| Consumer price index | Sep | 0.4% | 0.6% |
| Core CPI | Sep | 0.3% | 0.3% |
| CPI year over year | 3.7% | 3.7% | |
| Core CPI year over year | 4.1% | 4.3% | |
| Import price index | Sep | 0.1% | 0.5% |
| Import price index minus fuel | Sep | -0.2% | -0.1% |
| Consumer sentiment (preliminary) | Oct | 63 | 68.1 |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 33,670.29 |
| Nasdaq Composite | 13,407.23 |
| S&P 500 Index | 4,327.78 |
| CBOE Volatility Index | 19.32 |
| S&P GSCI | 595.84 |
| U.S. Dollar Index | 106.648 |
| 10-Year T-Note (Dec ’23) | 107-230 |
| Crude Oil WTI (Dec ’23) | 86.35 |
| Natural Gas (Nov ’23) | 3.236 |
| Gold (Dec ’23) | 1,941.5 |
| Silver (Dec ’23) | 22.895 |
| Corn (Dec ’23) | 493-2 |
| Wheat (Dec ’23) | 579-6 |
| Soybean (Nov ’23) | 1280-2 |
| Coffee (Dec ’23) | 154.90 |
| Sugar #11 (Mar ’24) | 22.08 |
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