August 25, 2023, Weekly Stock Market Return Recap. After three weeks of equity market losses, the US stock market indexes finished in the green for the week: The S&P 500 finished +0.8%, the Dow Jones gained 0.73% and the Nasdaq close the week up 0.94%. The market took refuge in that Powell’s Jackson Hole speech was not overly hawkish while he also noting economic strength: “The economy may not be cooling as expected. So far this year, GDP (gross domestic product) growth has come in above expectations and above its longer-run trend... The message is the same: It is the Fed’s job to bring inflation down to our 2 percent goal, and we will do so.” Powell also added, “we are prepared to move rates further, if appropriate.” However, Federal Reserve Bank of Philadelphia President Patrick Harker said he sees interest rates on hold for the rest of this year, and that policymakers have likely undertaken sufficient tightening. The U.S. Dollar Index hit a 10-week high as investors sought a safe haven due to concerns about China's economy, which is experiencing a further decline in health for its economy. China's central bank unexpectedly cut a range of key interest rates in a bid to spur growth in its faltering economy, and notably, China also suspended publication of its youth jobless data.
August 18, 2023, Weekly Stock Market Return Recap. For the week, the S&P 500 and Dow Jones both lost about 2% while the Nasdaq dropped 2.6%. Both the S&P 500 and Nasdaq have broken down below their 50-day moving averages for the first time in months. The Nasdaq has plummeted 7.2% in the past three weeks, its sharpest three-week drop since late December. Similarly, the S&P 500's three-week loss of 4.6%, marking its deepest decline since the three weeks ending on March 10. The August market pullback has been driven by equity investors concern over the bond market, the Fed’s interest rate path and China. Indeed, the weak economic data for China has a worldwide demand ripple effect and Fed Minutes suggests another rate hike is still on the table. Specifically, the Fed Minutes included the following phrases: "Most participants" continued to see "significant upside risks to inflation, which could require further tightening." Investors are acutely sensitive to strong economic data which is perceived to be tied to Fed rate hikes and the latest data out of the U.S. Commerce Department shows retail sales rose 0.7% in July after upward revisions in the previous two months. However, retailer CEOs have indicated the economy may finally lose some momentum later this year as student loan debt repayment returns in October.
August 11, 2023, Weekly Stock Market Return Recap. The S&P 500 and Nasdaq both gave up ground for the second week, falling 0.3% and 1.9%, respectively. The Producer Price Index (PPI) rose at a higher-than-expected pace of 0.3% last month after increasing 0.1% in June. Economists had expected wholesale inflation to rise, but only to 0.2%. The Consumer Price Index (CPI) also rose 3.2% in July over the prior year, a slight acceleration from June's 3% annual increase. Over 84% of the S&P 500’s market stock constituents have reported earnings with 72% beating estimates by 7.2%.
August 4, 2023, Weekly Stock Market Return Recap. The S&P 500 dropped 2.3% on the week, marking its biggest one-week decline since the week ended March 10. The tech-heavy Nasdaq stumbled around 2.8%, also its worst week in months. Market sentiment was rattled by the recent Fitch downgrade of U.S. debt from AAA to AA+. The only other time the U.S. faced a credit downgrade was in 2011, when Standard & Poor’s similarly lowered its rating one notch. On the economic front, the US economy created 187,000 new jobs in July while the unemployment rate fell to 3.5%, according to the Bureau of Labor Statistics. The July job report came in below expectations of a total 200,000 new jobs. The slowdown in hiring has a silver lining as many are looking for signs of a cooling labor market in an effort to tame inflation and prompt the Fed to pause future rate hikes.