Weekly Market Recap – September 1, 2023
The primary large-cap stock indexes in the U.S. witnessed weekly advancements, with the NASDAQ and the S&P 500 notably surpassing the Dow, mirroring the trend from the last week. Despite this, the small-cap benchmark markedly surpassed the large-cap counterparts in market capitalization.
While the S&P 500 showed promising growth in the latter part of August, it couldn’t counterbalance the earlier decline in the month, resulting in a roughly 1.8% drop and ending a five-month positive streak. Among the 11 sectors, only the energy sector reported a positive monthly outcome, while utilities experienced the most significant dip, as per the data from S&P Dow Jones Indices.
The U.S. job market in August saw an increase of 187,000, surpassing the revised numbers of June and July. However, this figure is considerably less than the 12-month average of 271,000, indicating a potential deceleration. The unemployment rate slightly increased to 3.8%, partially due to more individuals joining the workforce.
During the recent earnings season, S&P 500 companies reported an average earnings reduction of 4.1% compared to the same quarter last year, marking the third consecutive quarter of declining earnings, according to FactSet. The consumer discretionary sector stood out with the highest earnings growth rate for the second consecutive quarter, surpassing 50%.
The growth of the U.S. economy in the spring was slightly less than initially projected, with the latest revision indicating a 2.1% annual growth rate for the second quarter, compared to the 2.4% estimate announced in late July. This adjustment, which led to a rise in stocks, might persuade the U.S. Federal Reserve to maintain the current interest rates in their upcoming September meeting.
In July, the U.S. Federal Reserve noted a slight increase in consumer prices, with the Personal Consumption Expenditures Price Index rising to a 3.3% annual rate from 3.0% in June. Excluding the fluctuating food and energy prices, the core inflation rate was 4.2%, a slight increase from June’s 4.1%.
The 2-year U.S. Treasury bond yield saw a decline, falling significantly below the 5.00% mark noted the previous week, triggered by reduced expectations for medium-term rate hikes, which spurred a price rally for 2-year notes. By Friday, the yield had decreased to approximately 4.89%, a decline from the previous week’s 5.06%.
Lastly, the index monitoring short-term volatility in the U.S. equity market dropped nearly 17% over the week, reaching its lowest since January 2020. Apart from a brief surge in early August, the Cboe Volatility Index has maintained relatively low levels since the beginning of June, nearing the lowest points since the onset of the pandemic.
Major U.S. Economic Reports
|S&P Case-Shiller home price index (20 cities)||June||-1.2%||-1.7%|
|Job openings||July||8.8 million||9.2 million|
|Advanced U.S. trade balance in goods||July||-$91.2B||-$88.8B|
|Advanced retail inventories||July||0.3%||0.7%|
|Advanced wholesale inventories||July||-0.1%||0.5%|
|Pending home sales||July||0.9%||0.3%|
|Initial jobless claims||Aug. 26||228,000||232,000|
|Personal income (nominal)||July||0.2%||0.3%|
|Personal spending (nominal)||July||0.8%||0.6%|
|Core PCE index||July||0.2%||0.2%|
|Core PCE (year-over-year)||4.2%||4.1%|
|Chicago Business Barometer||Aug||48.7||42.8|
|U.S. nonfarm payrolls||Aug||187,000||157,000|
|U.S. unemployment rate||Aug||3.8%||3.5%|
|U.S. hourly wages||Aug||0.2%||0.4%|
|Hourly wages year over year||4.3%||4.4%|
|S&P U.S. manufacturing PMI (final)||Aug||47.9||47.0|
Closing Prices for the Week
|Dow Jones Industrials Average||34,837.71|
|S&P 500 Index||4,515.77|
|CBOE Volatility Index||13.09|
|U.S. Dollar Index||104.236|
|10-Year T-Note (Dec ’23)||110-185|
|Crude Oil WTI (Oct ’23)||85.55|
|Natural Gas (Oct ’23)||2.765|
|Gold (Dec ’23)||1,967.1|
|Silver (Dec ’23)||24.562|
|Corn (Dec ’23)||481-4|
|Wheat (Dec ’23)||595-4|
|Soybean (Nov ’23)||1369-2|
|Coffee (Dec ’23)||151.90|
|Sugar #11 (Oct ’23)||25.81|
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