Market Week: September 25, 2023
Presented by William Prentice, AWMA®, CFP®, CIMA®
KEY DATES/DATA RELEASES
9/26: New home sales
9/27: Durable goods orders
9/28: GDP
9/29: Personal income and outlays, international trade in goods
THE MARKETS (as of market close September 22, 2023)
Last week was a tough one for the markets. Each of the benchmark indexes listed here fell, with the Nasdaq notching its largest weekly decline since March. Many of the market sectors decreased, with only information technology and energy posting modest gains. The yield on 10-year Treasuries, an important indicator of the economy, climbed 11.0 basis points, reaching a 16-year high earlier in the week. The Federal Reserve projected that interest rates would remain higher for longer than expected, which might lead to a slowing of the economy. Crude oil prices ended last week slipping marginally. The dollar and gold prices eked out gains.
Stocks opened last week relatively flat as investors awaited the Federal Open Market Committee's upcoming interest-rate policy meeting and Fed Chair Jerome Powell's subsequent press conference. The Dow, the S&P 500, and the Nasdaq gained less than 0.1%, while the Russell 2000 (-0.7%) and the Global Dow (-0.4%) declined. Yields on 10-year Treasuries dipped 0.3 basis points to end last Monday's session at 4.31%. Crude oil prices rose 1.3%, settling at $91.95 per barrel. The dollar slid 0.2%, while gold prices rose 0.4%.
The markets ended lower last Tuesday on rising crude oil prices and higher bond yields. Declining growth stocks led the downturn, while the majority of the market sectors fell, with only health care, information technology, and communication services gaining. Each of the benchmark indexes listed here lost value with the exception of the Global Dow, which ended flat. The Russell 2000 (-0.4%) and the Dow (-0.3%) fell the furthest, followed by the S&P 500 and the Nasdaq, which slid 0.2%. Ten-year Treasury yields added 4.6 basis points to close at 4.36%. Crude oil prices increased 0.4%, reaching $91.59 per barrel. The dollar and gold prices dipped less than 0.1%.
Last Wednesday saw stocks lose value, despite the Federal Reserve opting to maintain interest rates at their current level (see below). However, Fed projections indicated that interest rates would remain higher for longer, which may have chilled investors. The Nasdaq fell 1.5%, followed by the S&P 500 (-0.9%), the Russell 2000 (-0.8%), the Global Dow (-0.4%), and the Dow (-0.2%). Yields on 10-year Treasuries dipped 1.6 basis points to 4.34%. Crude oil prices settled at $90.27, a decline of 1.0%. The dollar and gold prices advanced.
Stocks continued to tumble last Thursday, while the dollar hit its highest rate since March. Ten-year Treasury yields rose 13.1 basis points to 4.48%, the highest value since the 2008 global financial crisis. Wednesday's comments by Fed Chair Jerome Powell (see below) likely carried over into Thursday's trading. Each of the benchmark indexes listed here fell more than 1.0%, led by the Nasdaq (-1.8%), followed by the S&P 500 and the Russell 2000 (-1.6%), the Global Dow (-1.5%), and the Dow (-1.1%). The dollar rose 0.3%, settling at $105.41 against a basket of world currencies. Gold prices declined 1.4%. Crude oil prices fell for the second straight day after slipping 0.1% to $89.58 per barrel.
Last Friday saw Wall Street teeter between gains and losses, ultimately closing lower for the fourth straight session. The Global Dow slipped 0.4%, the Russell 2000 and the Dow fell 0.3%, the S&P 500 dipped 0.2%, and the Nasdaq lost 0.1%. Ten-year Treasury yields declined 4.2 basis points to 4.43%. Crude oil prices rebounded from earlier losses after gaining 0.8%. The dollar and gold prices advanced.
This is a very busy week for the release of some important economic data. The final estimate of second-quarter gross domestic product is available. The prior estimate showed the economy accelerated at an annualized rate of 2.1%. Also out this week is the August release of the report on personal income, consumer spending, and consumer prices. The previous month saw income creep up 0.2%, while consumer spending rose 0.8%. The personal consumption expenditures (PCE) price index, an indicator of inflation preferred by the Federal Reserve, revealed prices rose 0.2% in July and 3.3% over the past 12 months. As with the Consumer Price Index, rising energy prices, particularly oil and gasoline, are expected to impact the overall PCE price index..
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.
Prepared by Broadridge Advisor Solutions. © 2023 Broadridge Financial Services, Inc.