What happened this week
Stocks opened lower on Monday as the final trading day of October kicked off but despite this markets are expected to end a two month down streak. Markets made a huge comeback in October. The Dow lead gains and was last up 14% for the month. The Dow is on pace for its best month since 1976 as investors bet on more traditional companies, like banks, to lead the next rally. Traders are preparing this week for the latest Federal Reserve meeting beginning Tuesday. The central bank is expected to raise interest rates by 75 basis points on Wednesday. Many investors are hopeful for a signal from the Federal Open Market Committee’s statement or Chairman Jerome Powell’s press conference, that the Fed could pause rates hikes or at least reduce their size in the near future.
As we approach year end, one supply chain logistics expert is warning that more importers and retailers are signaling a shipping "decline coming about" and carrying into the new year. Supply chain woes have fueled inflation and as the holiday season approaches the usual spike in retail spending may be affected.
Looking ahead this week:
Tues Nov 1st: US S&P Manufacturing PMI
Wed Nov 2nd: ADP Employment Report
FOMC Announcement
Fed Chairman Press Conference
Thurs Nov 3rd: Foreign Trade Deficit
US Services PMI
Initial Jobless Claims
Fri Nov 4th: Unemployment Rate
What happened this week
The Dow Jones Industrial Average rose 370 points, or 1.2% at market open Monday morning. S&P 500 futures gained 0.7%, while the Nasdaq was trading down 0.1%.The Dow rose as traders tried to continue adding to gains seen last week.
Last week was another volatile week of trading and markets are preparing for more news this week as third quarter earnings continue to come in. The major averages had their biggest weekly gains since June, with the Dow advancing 4.9%. The S&P 500 and Nasdaq rose 4.7% and 5.2%, respectively.
A large part of those gains came Friday, when the Dow rallied more than 700 points, and the S&P 500 and Nasdaq each jumped around 2.3%. Investors are watching for earnings this week from Apple, Alphabet, Amazon and Microsoft. More inflation data will be released, with the October manufacturing and services purchasing managers indexes coming Monday.
News was very different in China on Monday morning with technology stocks dragging down broad indices, this came after a political reshuffle tightened President Xi Jinping's grip on power, investors are concerned this could be a negative for private firms.
Tech giants Alibaba and Tencent closed down more than 11% in Asia; search company Baidu was 12% lower and the food delivery firm Meituan dropped more than 14%. Hong Kong’s Hang Seng Index tanked down 6.36% to its lowest levels since April 2009.
JPMorgan president Daniel Pinto said "the Fed is not out of line as it battles inflation through interest rates." And he said a recession as a result would be a necessary evil.
This week:
Mon Oct 24th: S&P US Manufacturing PMI
Tues Oct 25th: Case Shiller, Home price index
Thurs Oct 27th: Real GDP first estimate Q3
Fri Oct 28th: PCE Price Index
Real Consumer Spending
What happened this week
After another rollercoaster week of trading, with the S&P 500 reporting a 1.6% loss, futures over the weekend were slightly higher.
In September inflation (Consumer Prices) was still up a further 0.4%, surpassing expectations, and causing another week of market swings. Fears amongst investors remain focussed on the Fed’s potential rates hikes, which many economists think may drive the US economy further into a recession rather than offering the remedy desired.
Globally, countries continue to take measures to treat inflation problems; Liz Truss, the new British Prime Minister, announced that the UK would abandon a previously approved tax cut and the Chinese President Xi Jinping spoke of China’s shift from rapid economic growth to “national self-sufficiency”. What is clear to see is how the markets are reacting sharply to any fiscal policy announcements.
This week continues the third quarter earnings season with financial reporting early in the week.
Bank of America reports before market open on Monday and Goldman Sachs announces results on Tuesday. The blue chip technology companies all report this week as well; Netflix, Tesla, IBM, Johnson & Johnson, United Airlines, AT&T, Procter and Gamble and Verizon.
This week:
Tues Oct 18: Industrial Production Index
Wed Oct 19: Housing Starts and Building Permits
Thurs Oct 20: Jobless Claims
Fri Oct 21: Index of Common Inflation Expectations 5-10 years (CIE), a broad-based quantitative measure of medium term expectations.
What happened this week
Last week was another weeks of highs and lows for investors, the first half brought a rally that pushed the S&P 500 up more than 5% in its largest two-day gain since 2020. Job growth came in below expectations in September and the unemployment rate declined despite efforts by the Federal Reserve to slow the economy. Nonfarm payrolls increased 263,000 for the month, compared with the Dow Jones estimate of 275,000 and economists are speculating that the Federal Reserve will continue to raise rates to fight inflation and a global economic crisis.
The OPEC+ alliance announced Wednesday that it will cut oil production by 2 million barrels a day, pushing gas prices higher as a result.
Credit Suisse has been in the news this week, announcing it will buy back $3 billion in debt and sell a landmark hotel to cover plunging share prices and concern over its debt exposure. Although rising credit risk among European banks may bring back memories of the 2008 global financial crisis, analysts have stressed that capital buffers are now significantly higher.
Coming up this week:
Mon Oct 10th: Columbus Day- Bond market closed
Wed Oct 12th: Producer price index
Thurs Oct 13th: Consumer price index
Fri Oct 15th: Retail Sales
What happened this week
It was a rough end to the quarter as September closed on Friday with losses across all indices. The S&P 500 fell 1.5% to close at 3,585.62 Friday. The Dow Jones Industrial Average dropped 1.7% to 28,725.51. The Nasdaq composite slid 1.5% to 10,575.62. The tech-heavy index has dropped 10.5% in September and is down 32.4% so far this year.
The ‘October Effect’, as we enter the final quarter of the year investors on Wall Street are nervous about the looming ‘October Effect’. In an analysis by LPL Financial, October historically has been the most volatile month for markets, seeing the most swings of greater than 1%.
On Monday Oil futures were on the rise after OPEC announced they were considering cutting production by more than 1 million barrels a day.
This coming week, investors will be focussed on jobs data as we enter the fourth quarter of the year and start the earnings season.
Mon Oct 3rd: Construction spending and the ISM manufacturing PMI
Thurs Oct 6th: Earnings reports, Target, Alphabet and Twitter.
Fri Oct 7th: September jobs report, Wholesale Inventories and Consumer Credit.
What happened this week
Major US stock indexes closed last week down, the Dow Jones industrial average dropped by 483 points, or 1.6 percent, at Friday’s close, and fell below the 30,000 mark, the S&P 500 slid by 1.7 percent, and the Nasdaq Composite by 1.8 percent. Blue-chip stocks plunged to their lowest level since 2020 on Friday.
Last week, U.S. crude futures also fell 6% to their first close below $80 a barrel since Jan. 11 and US and UK Government-bond yields hit their highest level in more than a decade.
On Wednesday, the Federal Reserve approved a third consecutive 75-basis-point hike in interest rates, raising the central bank's benchmark lending rate to a new range of 3%-3.25%., this is the highest the fed funds rate has been since the financial crisis of 2008.
The effects of high inflation were evident in the September levels for confidence among builders in the U.S. housing market. The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the single-family housing market, fell for the ninth consecutive month to 46.(Anything below 50 is considered negative). Investors fear the combination of high inflation and high interest rates will continue to bring the housing market dow.
Looking ahead to this week:
Tues Sept 27: Durable goods orders (measure of current industrial activity)
S&P Case Shiller US Home Price Index (bench mark for average price of single family homes)
Thurs Sept 28: Q2 Real Gross Domestic Product revision
Fri Sept 30: Core PCE Index (measure of prices for US goods and services)
Editor’s note
We would like to announce the arrival of Miriam Isabel Rodriguez, who was born on Wednesday August 31 to Claudia and her husband Israel. Mother and child are both well. We thank God for this miracle.
What happened this weeK
The market didn't like what it saw in Tuesday's CPI report, and stocks showed it! The Dow fell nearly 1300 points Tuesday. Tuesday's inflation report came in higher than expected signaling that not only is the problem of inflation not over but the path ahead for interest rates sees further drastic rates hikes. Analysts had hoped that Fed officials would consider easing their pace of interest-rate increases if data continued to show inflation subsiding but Tuesday’s report squashed any hope.
Stocks continued to fall through Friday closing as one of the worst weeks in months and traders reacted to an ugly earnings warning from FedEx about the global economy.
The Dow Jones Industrial Average dropped 139.40 points, or 0.45%, to close at 30,822.42. The S&P 500 shed 0.72% to end the week at 3,873.33. The Nasdaq Composite slid 0.90% to finish at 11,448.40. It was the worst week for the S&P 500 and Nasdaq since June.
On Friday, shares of FedEx dropped 21.4%, their worst daily drop ever. The company announced cost-cutting initiatives and withdrew their full-year profit projections citing the fact the global economy has “significantly worsened.”
Ford has committed over $50 billion to electrify its lineup with new products and the factories needed to build them, but Ford CEO Jim Farley said it is also continuing to spend on future internal combustion engine (ICE) models like the like the 2024 Ford Mustang.
"We’re investing in ICE segments where we’re dominant and where we think, as competitors leave the segments, we can actually grow," Farley told FOX Business.
"I find it intriguing that we’re portraying the future of our industry as monolithic. That’s not how it goes. That’s not how it’s going to manifest itself."
In March, Ford split its core business into the Ford Blue division, dedicated to ICE and hybrid vehicles, and the Model e division, which is focused on fully electric products. Ford has taken a different approach to its competitors, like General Motors and Volkswagen, who have committed to all-electric futures in the U.S. It has even given its dealers the option of just selling ICE models if they do not want to make the investments required to support EV sales.
Goldman Sachs is cutting its U.S. Gross Domestic Product for 2023 and sees the unemployment rate rising higher than previously expected. In a note released late Friday, Goldman lowered its expected GDP growth from 1.5% to 1.1%. Goldman now expects a 75 basis point hike at the September Fed meeting and sees a further 50 bp hikes in November and December, with the fed funds rate peaking at 4-4.25% by the end of the year.
Coming up this week:
Tues Sept 20th: Building Permits and Housing Starts numbers.
Wed Sept 21st: 2pm Federal Reserve statement and news conference with Jerome Powell - expected another significant rates hike.
Thurs Sept 22nd: Jobless claims
What happened this weeK
This past Thursday was the passing of Queen Elizabeth II’s, her reign of more than seventy years made her the longest reigning monarch of Great Britain. Her death marked a historic change in titles and roles within the royal family as the newly-appointed King Charles III named his firstborn son, William, and wife Catherine the Prince and Princess of Wales.
Stock futures were higher Sunday night, investors on Wall Street are expecting key inflation data to be released this week. The moves over the weekend come after a positive week for U.S. stocks, as all three major averages closing the week higher, the Dow added 2.66% on the week, while the S&P 500 gained 3.65%. The Nasdaq Composite was 4.14% higher.
Investors remain focused on interest-rate news. The European Central Bank raised its key rate by 0.75 percentage point Thursday, in an aggressive move to fight inflation.
In international news; Xi Jinping will leave China for the first time in more than two years for a trip this week to Central Asia where he will meet Russia’s Vladimir Putin. China’s president will meet Putin at the Shanghai Cooperation Organization’s summit in the ancient Silk Road city of Samarkand in Uzbekistan, the Kremlin has said. Speculators agree the meeting will give Xi an opportunity to flaunt his role as China’s most powerful leader, while Putin can demonstrate Russia’s political partiality towards Asia; both leaders can show their opposition to the United States just as the West seeks to punish Russia for the Ukraine war.
Looking ahead to this week:
Tues Sept 13th; August consumer price index report, one of the final pieces of data on inflation the Fed will see ahead of its September meeting, where they will determine the next potential interest rate hike.
Thurs Sept 15: Retail sales and industrial production; expected another 0.3% increase in the core rate for August, if the number is lower could spark a potential market rally.
Editor’s note
We would like to announce the arrival of Miriam Isabel Rodriguez, who was born on Wednesday August 31 to Claudia and her husband Israel. Mother and child are both well. We thank God for this miracle.
What happened this week
Major indices closed around -1% on Friday before the long weekend, making in the third consecutive week of declines. Many investors speculated that a further reduction in equity positions may be expected to weather the volatile trading expected for the week following Labor Day. Credit Suisse’s global chief investment officer, Michael Strobaek, said, “Markets had factored in too much hope and not enough economic realities.
The best news that came out on Friday was the unemployment rate increased to 3.7% in August from 3.5% in the prior month. The increase is largely attributed to the labor force growing by 786,000 people, a bigger labor supply is good for employers and may help reduce inflation. The U.S. labor market added 315,000 jobs in August, hitting a 20-month streak in strong job growth that’s powering the economy.
Over the weekend the Russian energy giant Gazprom missed its Saturday deadline and indefinitely extended its gas cuts to Europe. The state owned energy company cited urgent maintenance was behind its extension and did not provide a future date when it intends to reopen. The Nord Stream 1 Pipeline, distributes natural gas to Europe through Germany.
Bed Bath and Beyond confirmed on Sunday that its Chief Financial Officer Gustavo Arnal died over the weekend, after police had said earlier that Arnal fell to his death. Investigators believe Arnal’s fall was intentional, Arnal was the subject of a class action lawsuit alleging that he and majority shareholder, Gamestop Chairman Ryan Cohen, had artificially inflated the company’s value in a "pump and dump" scheme. Arnal died days after the company announced plans to close 150 stores, cut employees by 20% and add more than $500 million in new financing. The cost-cutting measures come as Bed Bath’s core business continues to struggle.
Looking ahead at the short trading week:
Mon Sept 5th: LABOR DAY: MARKETS CLOSED
Wed Sept 7th: International Trade Balance
Fed Beige Book
Thurs Sept 8th: Jobless Claims
Editor’s note
We would like to announce the arrival of Miriam Isabel Rodriguez, who was born on Wednesday August 31 to Claudia and her husband Israel. Mother and child are both well. We thank God for this miracle.
What happened this week
All three major indexes declined more than 4% for the week, the markets had a roller coaster week of trading with investors weighing worries over Fed tightening against economic data that pointed to underlying strength in the U.S. economy.
On Thursday, indexes were ahead after data showed the economy shrank less than previously thought in the second quarter. The revised GDP rate shrank 0.6% vs the previously reported 0.9% but continued to meet the technical criteria for a recession.
The big moves came on Friday after Jerome Powell, Federal Reserve Chairman, spoke vowing to continue raising rates to fight inflation, even at the expense of economic growth. Surprisingly the markets dropped dramatically in reaction to his statements, with the Dow Jones Industrial Average dropping 1000 points, despite investors expecting and bracing for Powell to continue to hold a tough stance on fighting inflation.
Even with this week’s losses, the S&P 500 is up 11% from its June low. Stocks rallied for much of the summer based largely on solid corporate earnings season and some upbeat data releases despite inflation.
The Federal Reserve is likely to decide whether to raise rates by half point or 0.75 point at their next meeting, Sept. 20-21.
Additionally data released Friday showed that the core PCE, personal-consumption expenditures, price index—the Fed’s preferred gauge of inflation—came in slightly below forecasts, indicating inflation pressures may be easing.
In other news this week Biden announced up to $20,000 in federal student loan forgiveness for borrowers earning less than $125,000. The student loan handout is expected to cost roughly $500B, according to Committee for a Responsible Federal Budget, critics argue the program will contribute to already record-high levels of inflation in the U.S. Senate Minority Leader Mitch McConnell argued the program is "yet another way to make inflation even worse, reward far-left activists, and achieve nothing for millions of working American families who can barely tread water."
Looking ahead to this week:
Tues Aug 30: S&P Case-Shiller US Home Price Index (benchmark fo single family home prices In the US calculated monthly)
Thurs Sept 1: Jobless Claims
US Manufacturing PMI
Construction Spending (all indicators of how the economy is responding inflation and Fed expectations for further rates hikes)
Fri Sept 2: August Unemployment Rate
What happened this week
Friday saw the end of the Wall Street’s summer rally; the S&P 500 slid 1.29% to close at 4,228.48, while the Dow Jones Industrial Average tumbled 292.30 points, or 0.86%, to 33,706.74. The Nasdaq Composite dropped 2.01% to settle at 12,705.22.
Minutes released from the Federal Reserve’s July meeting and comments from St. Louis Federal Reserve President James Bullard indicated that the central bank probably continue hiking rates in the near term. Despite the week’s moves, many investors and traders are holding out hope for a bounce back.
In other news, President Joe Biden signed the Inflation Reduction Act into law, the more than $430 billion package is expected to reduce the deficit by more than $300 billion over a decade.
Retail activity was flat in July due to falling fuel prices and consumers turning more heavily to online shopping, major retailers reporting mixing earnings. Target’s profits dropped as it slashed prices to clear out unwanted inventory ahead of the fall back to school season. The retailer maintained its forecast for the year, choosing to take the hit this quarter and hoping to recover losses by the end of the year. Lowe’s similarly reported lower revenue than expected, $27.48 billion vs. $28.12 billion expected, CEO Marvin Ellison said despite rising costs, the consumer looks healthy. He also noted a common trend amongst major retailers; despite a drop in transaction volume they saw the average ticket per customer rose 6.5% (partially due to inflation).
Looking ahead to next week:
Wed Aug 24 Durable Goods orders for July are expected at 0.6% lower than the previous 2.0%, indicator of how confident the consumer is that the recession over or simply on pause.
Thurs Aug 25 Weekly Jobless Claims; expected another 254,000 new claims
Fri Aug 26 PCE price index; Personal Consumption Index, this index takes into account both durable and non-durable goods, as well as services, used by the Fed to measure inflation. Forecast for the monthly index shows a decline from 0.6% last month to 0.2%.
WHAT HAPPENED THIS WEEK
After almost two months of declining prices at the pump, the national average price for a gallon of gas fell below $4 on Thursday for the first time since early March. The milestone for falling gas prices coincides with a slowdown in price increases for goods overall.
On Wednesday the consumer price index, CPI, rose 8.5% over the past year as of July. This was a notable slowdown from 9.1% in June, largely due to the decline in gasoline prices which make up a large portion of the CPI.
All three major U.S. indices closed higher last week. For the S&P 500, it was the fourth winning week in a row, closing at 4,280.15, up 2.99% on the week.
Looking ahead to this week, retailer earnings will be in the spotlight. On Tuesday, Walmart, which previously slashed earnings forecasts, will give investors a look at the effects inflation and overstocked inventories are having on margins. Target reports Wednesday and Home improvement retailers Home Depot and Lowe’s report Tuesday and Wednesday, respectively.
In China early Monday morning, the government reported industrial production and retail sales growth that fell below analysts’ expectations. Investment in manufacturing slowed down, while a decline in real estate investment accelerated. US stock futures were down in the premarket trading.
Looking ahead to the week:
Tues Aug 16: Housing Starts, the slowing economy, combined with inflation and interest rates eroding consumer purchasing power, present large challenges for the housing market through the rest of the year.
Industrial Production Index, short term changes in industrial production expected at rise to 0.3%.
Wed Aug 17: Retail Sales, major focus this week with company earnings reports and retails sales number expected to reflect consumers response to previous rates hikes and speculation of further hikes in the coming months.
Thurs Aug 18: Initial Jobless Claims, expected to continue the previous week’s trend adding 265,000 new claims this week.
WHAT HAPPENED THIS WEEK
This week’s big news came in Friday morning with the labor market adding 528,000 new jobs in July, far surpassing the 258,00 estimate. This pushed unemployment down to 3.5%, below the 3.6% estimate. Friday saw a volatile day for trading with stocks opening lower and the S&P 500 eventually closing down 6.75 points (-0.16%) at 4,145.19.
Job growth was expected to slow as a result of the Fed’s recent and continued hikes to interest rates to calm inflation. However, this report not only showed a positive labor market but also fueled speculation that the Fed will continue to act aggressively at its next meeting in September, with markets pricing in another potential 0.75 point interest rate hike.
Bank stocks rose on hopes that interest rate hikes will continue, energy stocks also gained, but technology companies slumped. Many investors expected a large sell of on Friday but the week closed supporting hopes for a ’soft landing’ coming out of the recession marked by the first two quarters of 2022.
Looking ahead to this week:
Wed Aug 10th: Consumer Price Index (most commonly used measure of inflation), is expected to continue to show inflation pressure despite the recent dip in gasoline prices seen in July.
Thurs Aug 11th Jobless Claims, initial jobless claims expected to add another 265,000 claims, expecting a continued rise in requests for state benefits.