October 27, 2023, Weekly Stock Market Return Recap. All three major stock indexes registered steep weekly losses, led by the Nasdaq -2.6% followed by S&P 500 and the Dow Jones, -2.5% and -2.1%, respectively. Two of the largest market capitalization stocks in the Nasdaq, Facebook’s Meta Platforms and Google-parent company Alphabet, disappointed the markets with earnings and were sharply down for week. Overall, stocks have hit a technical correction with the S&P 500 down over 10% from its yearly high. With about half of the S&P 500 stocks having now reported, shares of companies that disappointed analysts’ estimates on the earnings-per-share metric have seen their stock underperform the benchmark index by a median of 3.7%. That’s the worst performance in the data’s history going back to the second quarter of 2019. Even publicly traded US stocks beating estimates have lagged the S&P 500 by 0.6%, which is the first such underperformance since the fourth quarter of 2020. The US economy grew at its fastest pace in nearly two years at 4.9% during the most recent quarter ending in September. Economists surveyed by Bloomberg estimated the US economy grew at an annualized pace of 4.5% during the period. Indeed, GDP continues to defy predictions for a slowdown as many expected the Federal Reserve's monetary tightening to constrain the American consumer.
October 20, 2023, Weekly Stock Market Return Recap. US stocks fell to four-month lows on the week, led by the Nasdaq -1.5%, followed by the S&P 500 -1.3% and Dow Jones -0.9%. The losses were spurred by fears that the Israel-Hamas conflict could further escalate in the Middle East, Fed rate hike talk and strong monthly retail sales. Fed Chair Powell spoke on Thursday, remarking “Doing too little could allow above-target inflation to become entrenched and ultimately require monetary policy to wring more persistent inflation from the economy at a high cost to employment.” Powell further commented that “additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.” Retail sales rose 0.7% in September from the previous month, more than double Wall Street expectations of 0.3% growth, spurring further rate hike concerns.
October 13, 2023, Weekly Stock Market Return Recap. U.S. equity market ended the week higher on lower interest rate expectations, better-than-expected corporate earnings, and rising oil prices. The S&P 500 finished the week up 0.45% after giving back -0.5% on Friday, marking its second week of positive results, while the Dow Jones return +0.79%. Energy, utilities, and real estate sectors outperformed in the week, while consumer staples, health care, and materials were the laggards. Food and energy increased more than anticipated in the month of September by 0.5%, marking the third straight month of inflationary increases.
October 6, 2023, Weekly Stock Market Return Recap. The broad US market equity index of the S&P 500 rose for the week, snapping a four-week losing streak. For the week, the S&P 500 finished up 0.5%, the Dow fell 0.3% and the Nasdaq rose 1.6%. Every consumer confidence measurement is below pre-pandemic levels, with consumer confidence falling again in September 2023 to a four-month low, marking two consecutive months of decline. Further, the overall Economic Optimism gauge plummeted 16% to 36.3, marking the weakest since August 2011 and its 26th straight month in negative territory. However, the job front remains healthy, with the US economy adding 336,000 jobs in September, almost double the number expected. Employment continues to spike investors worry that overall resiliency on the jobs front will give the Fed conviction for a more restrictive policy going forward. Further, the number of open jobs by the JOLTS report showed an increase for August, raising questions of whether the job market is tempering fast enough to appease the Federal Reserve. Case in point, Cleveland Fed President Loretta Mester said Tuesday she is likely to favor a rate hike at the next meeting if the current economic situation holds.