Weekly Market Recap – September 8, 2023
The primary stock indexes in the U.S. experienced a decrease ranging from 1% to 2%, relinquishing much of the progress made in the preceding week. Contrary to the outcomes of the week before, the NASDAQ lagged behind the S&P 500 and the Dow, partially due to significant midweek drops in several prominent tech stocks.
The U.S. small-cap stock index witnessed a 3.6% dip over the week, prolonging a period of diminished performance for this asset category. Since July’s end, the Russell 2000 Index has seen a roughly 7.6% decline, compared to a 2.9% decrease in the S&P 500, a large-cap index.
On Friday, the U.S. crude oil’s value escalated to its peak since the previous November, surpassing $87/bbl. Over the last two weeks, the price has surged by almost 10%, spurred by fresh concerns over oil supply, thereby intensifying inflationary strains in the wider economy.
During the recent holiday-curtailed week, U.S. stocks endured their most significant downturn on Wednesday following a report that reignited worries of escalating inflationary trends, which might precipitate additional hikes in interest rates. The service sector of the U.S. economy grew for the eighth successive month, surpassing the predictions of numerous economists.
The Chinese government noted a successive monthly reduction in both exports and imports. Calculated in U.S. dollars, the exports from China decreased by 8.8% in August compared to the same period last year, while imports reduced by 7.3%, continuing the downward trend observed throughout 2023.
The anticipation of potential hikes in interest rates in the upcoming months negatively impacted the 2-year U.S. Treasury bonds’ values. This depreciation pushed the closing yield of the 2-year note to 5.01% on Wednesday, nearing its highest point of 5.05% recorded in early March. The closing yield on Friday was noted at 4.97%.
Following the recent rise in numerous U.S. economic markers, a diminished number of corporate leaders are discussing the likelihood of a recession. According to data from research entity FactSet, only 62 firms in the S&P 500 referred to “recession” during the recent quarterly earnings discussions, a significant decrease from 113 and 238 mentions in the previous quarter and the year before, respectively.
The forthcoming Consumer Price Index report, set to be unveiled on Wednesday, will indicate if the recent dip in inflation persisted through August. The latest data from July revealed a minor increase in annual inflation to 3.2% from 3.0% in the preceding month. Nevertheless, when disregarding the fluctuating energy and food expenses, the core inflation experienced a slight decline to 4.7% from 4.8% in the previous month.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| Factory orders | July | -2.1% | 2.3% |
| U.S. trade deficit | July | $65B | -$63.7B |
| S&P final U.S. services PMI | Aug | 50.5 | 51 |
| ISM services | Aug | 54.5% | 52.7% |
| Initial jobless claims | Sept. 2 | 216,000 | 229,000 |
| U.S. productivity (revision) | Q2 | 3.5% | 3.7% |
| Unit-labor costs (revision) | Q2 | 2.2% | 1.6% |
| Wholesale inventories | July | -0.2% | -0.5% |
| Consumer credit | July | $17.9B |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 34,576.59 |
| Nasdaq Composite | 13,761.53 |
| S&P 500 Index | 4,457.49 |
| CBOE Volatility Index | 13.84 |
| S&P GSCI | 606.99 |
| U.S. Dollar Index | 105.090 |
| 10-Year T-Note (Dec ’23) | 109-295 |
| Crude Oil WTI (Oct ’23) | 87.51 |
| Natural Gas (Oct ’23) | 2.605 |
| Gold (Dec ’23) | 1,942.7 |
| Silver (Dec ’23) | 23.174 |
| Corn (Dec ’23) | 483-6 |
| Wheat (Dec ’23) | 595-6 |
| Soybean (Nov ’23) | 1363-0 |
| Coffee (Dec ’23) | 148.65 |
| Sugar #11 (Oct ’23) | 26.31 |
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