Weekly Market Recap – September 29, 2023
The S&P 500 experienced its fourth consecutive weekly decline, reaching its lowest point in nearly four months. Although the index only decreased by less than 1% for the week, it performed better than the Dow, while the NASDAQ managed to achieve a slight increase.
Except for 2-year Treasuries, the yields on most categories of government bonds continued to rise, with the 10-year Treasury yield surpassing 4.50% for the first time since October 2007. Similarly, the 30-year yield exceeded 4.70%, marking its highest level since February 2011.
September witnessed a nearly 5% decline in the S&P 500, making it the second consecutive month of losses in a shift of market momentum that eroded a significant portion of the stock market’s year-to-date gains. By the close of Friday, the index had dropped by almost 7% from its peak on July 31.
Throughout the week, investors were on edge due to the potential of a U.S. government shutdown, as Congress struggled to reach a consensus on a supplemental spending plan before the weekend deadline. U.S. Treasury bonds displayed heightened volatility, contributing to another weekly increase in long-term debt yields.
The U.S. Federal Reserve’s preferred indicator for tracking inflation showed the slowest monthly increase since November 2020. In August, the Personal Consumption Expenditures Price Index rose at an annual rate of 3.9%, excluding volatile food and energy prices. When factoring in those categories, inflation stood at a more moderate 3.5%.
One measure revealed that the average U.S. mortgage rate reached its highest point in 23 years, while new home sales fell short of expectations in August, declining by 8.7% compared to July.
As we approach the third-quarter earnings season, more U.S. companies have revised their earnings-per-share expectations downward than upward. As of Friday, 74 companies in the S&P 500 issued negative guidance, while 42 provided a more optimistic outlook than previously anticipated, according to FactSet. Initial earnings reports are scheduled to be released in mid-October, beginning with some of the largest banks.
A U.S. labor market update, expected to be released on Friday, will reveal whether the recent trend of slowing job growth extended into September. In August, the economy added 187,000 new jobs, well below the monthly average of 271,000 jobs over the past 12 months, leading to a rise in August’s unemployment rate to 3.8% as more Americans joined the workforce.
Major U.S. Economic Reports
|S&P Case-Shiller home price index (20 cities)||July||0.1%||-1.2%|
|New home sales||Aug||675,000||739,000|
|Durable-goods minus transportation||Aug||0.4%||0.8%|
|Initial jobless claims||Sep 23||204,000||202,000|
|Pending home sales||Aug||-7.1%||0.9%|
|Core PCE index||Aug||0.1%||0.2%|
|Core PCE (year-over-year)||3.9%||4.3%|
|Advanced U.S. trade balance in goods||Aug||-$84.3B||-$90.9B|
|Advanced retail inventories||Aug||1.1%||0.2%|
|Advanced wholesale inventories||Aug||-0.1%||-0.2%|
|Chicago Business Barometer||Sep||44.1||48.7|
|Consumer sentiment (final)||Sep||68.1||67.7|
Closing Prices for the Week
|Dow Jones Industrials Average||33,507.50|
|S&P 500 Index||4,288.05|
|CBOE Volatility Index||17.52|
|U.S. Dollar Index||106.174|
|10-Year T-Note (Dec ’23)||108-020|
|Crude Oil WTI (Nov ’23)||90.79|
|Natural Gas (Nov ’23)||2.929|
|Gold (Dec ’23)||1,866.1|
|Silver (Dec ’23)||22.450|
|Corn (Dec ’23)||476-6|
|Wheat (Dec ’23)||541-4|
|Soybean (Nov ’23)||1275-0|
|Coffee (Dec ’23)||146.15|
|Sugar #11 (Mar ’24)||22.08|
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