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Weekly Market Insights

The Markets (as of market close October 8, 2021)

Stocks closed last week generally higher, despite a weak jobs report. A Congressional deal to extend the debt ceiling until early December helped drive stocks higher during the middle of the week. A poor showing last Friday was not enough to prevent the benchmark indexes from closing the week mostly in the black. The Dow enjoyed its biggest weekly gain since June. The S&P 500 advanced, while the Global Dow ended the week up over 1.3%. The Nasdaq eked out a gain, but the Russell 2000 dipped nearly 0.4%. Among the market sectors, energy jumped 5.0%, financials rose 2.3%, industrials climbed 1.8%, utilities increased 1.5%, and consumer staples advanced 1.4%. The yield on 10-year Treasuries gained 14 basis points to close the week at the highest level since June 4. Crude oil prices continued to rise, closing in on $80.00 per barrel. The dollar rose marginally, while gold prices declined.

 

Wall Street did not get off to a strong start last Monday. The Dow fell over 320 points and the Nasdaq lost more than 2.0%. A sell-off in shares of tech/growth stocks including a major social-media company, led equities lower last Monday. With Monday's downturn, the Nasdaq has declined about 7.0% since its September 7 peak as it inches closer to -10.0% correction territory. A jump in energy and utility shares wasn't enough to keep the S&P 500 from dipping 1.3%. The Russell 2000 lost 1.1% and the Global Dow slid 0.3%. Treasury yields and crude oil prices rose, while the dollar slipped.

 

Tech shares recovered from Monday's decline to help drive the market higher last Tuesday. The Nasdaq jumped 1.3% to lead the benchmark indexes. The S&P 500 gained 1.1%, the Dow climbed 0.9%, the Global Dow gained 0.8%, and the Russell 2000 added 0.5%. The yield on 10-year Treasuries rose to 1.52%. Crude oil prices gained nearly 2.0% to reach $79.14 per barrel. The dollar advanced nearly 0.25%. Financials, communication services, and information technology increased at least 1.5% to lead the market sectors.

 

Wall Street ended last Wednesday generally higher on news that Congress was making progress toward a debt ceiling resolution. The Nasdaq (0.5%), the S&P 500 (0.4%), and the Dow (0.3%) rose, while the Russell 2000 (-0.6%) and the Global Dow (-0.3%) fell. Ten-year Treasury yields dipped, but remained over 1.52%. The dollar advanced, while crude oil prices declined. Energy, materials, and health care were the only market sectors to fall. Consumer staples and real estate advanced 1.0%.

 

Stocks posted a third straight day of gains last Thursday following the deal to push back the expiration of the debt ceiling to December 3. A larger-than-expected decline in new claims for unemployment insurance also helped bolster investor confidence. Consumer discretionary, health care, and materials led the market sectors. Each of the benchmark indexes listed here gained ground, led by the Russell 2000 (1.6%), followed by the Nasdaq (1.1%), the Dow (1.0%), the Global Dow (0.9%), and the S&P 500 (0.8%). Treasury yields reached 1.57%. The dollar dipped, while crude oil prices climbed nearly 2.0% to $78.85 per barrel.

 

Equities fell on weak jobs data last Friday. The Russell 2000 (-0.8%) and the Nasdaq (-0.5%) headed the declines. Only the Global Dow ended the day in the black. Energy and financials were the only market sectors to end the day higher. Ten-year Treasury yields continued to climb, closing last Friday at 1.60%. The dollar fell for the second consecutive day, while crude oil prices rose for the second consecutive day.

 

The national average retail price for regular gasoline was $3.190 per gallon on October 4, $0.015 per gallon more than the prior week's price and $1.018 higher than a year ago. Gasoline production decreased during the week ended October 1, averaging 9.4 million barrels per day. U.S. crude oil refinery inputs averaged 15.7 million barrels per day during the week ended October 1 — 330,000 barrels per day more than the previous week's average. Refineries operated at 89.6% of their operable capacity, up from the prior week's level of 88.1%.

Market/Index

2020 Close

Prior Week

As of 10/8

Weekly Change

YTD Change

DJIA

30,606.48
 34,326.46 34,746.25 1.22% 13.53%

Nasdaq

12,888.28

 15,566.70 14,579.54
0.09%

13.12%

S&P 500

3,756.07

4,357.04 4,391.34 0.79%

16.91%

Russell 2000

 1,974.86 2,241.63

2,233.09

-0.38% 13.08%

Global Dow

3,487.52

3,973.93

4,026.66 1.33%

 

15.46%

Fed. Funds target rate

0.00%-0.25%

0.00%-0.25%

0.00%-0.25%

0 bps

0 bps

10-year Treasuries

0.91%

1.46%

1.60%

14 bps

69 bps

US Dollar-DXY

89.84

94.04

94.10

0.06% 4.74%

Crude Oil-CL=F

$48.52 $75.76 $79.48 4.91% 63.81%

Gold-GC=F

$1,893.10

$1,760.10 $1,756.80 -0.19%

 

-7.20%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • Employment rose by 194,000 in September, well short of expectations. There were some encouraging signs, however. The unemployment rate fell by 0.4 percentage point to 4.8%, down from 7.8% in September 2020. The number of unemployed persons decreased by 710,000 to 7.7 million (12.5 million in September 2020). Despite these improving figures, they remain above their levels prior to the COVID-19 pandemic (3.5% and 5.7 million, respectively, in February 2020). Employment is down 5.0 million, or 3.3%, from its pre-pandemic level in February 2020. The labor force participation rate dipped 0.1 percentage point to 61.6%, while the employment-population ratio inched up 0.2 percentage point to 58.7%. The number of persons not in the labor force who currently want a job was 6.0 million in September. These individuals were not counted as unemployed because they were not actively looking for work during the last four weeks or were unavailable to take a job. In September, 13.2% of employed persons teleworked because of the pandemic, while 5.0 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic. Average hourly earnings rose by $0.19 to $30.85 in September. Average hourly earnings have risen 4.6% since September 2020. The average work week increased 0.2 hour to 34.8 hours.

  • According to the latest report from IHS Markit, the purchasing managers' services index expanded in September, but at the slowest pace in the last 13 months. Labor shortages hindered output growth, while sales were negatively impacted by the spread of COVID-19. Meanwhile, cost pressures rose for the second consecutive month as input prices increased at a steep rate. Companies continued to pass on higher costs to clients, but at the slowest pace in the last five months.

  • The goods and services trade deficit expanded by 4.2% to $73.3 billion in August. Exports grew 0.5%, while imports increased 1.4%. Year to date, the goods and services deficit increased $140.8 billion, or 33.7%, from the same period in 2020. Exports increased $244.3 billion, or 17.5%. Imports increased $385.1 billion, or 21.2%. The trade deficit for goods (not including services) with China increased $3.1 billion to $28.1 billion in August. The deficit with Canada increased $1.4 billion to $5.1 billion, while the deficit with Mexico decreased $1.9 billion to $6.6 billion.

  • The number of new claims for unemployment insurance benefits rose for the third consecutive week. For the week ended October 2, there were 326,000 new claims for unemployment insurance, a decrease of 38,000 from the previous week's level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 25 was 2.0%, a decrease of 0.1 percentage point from the previous week's rate, which was revised up by 0.1 percentage point. The advance number of those receiving unemployment insurance benefits during the week ended September 25 was 2,714,000, a decrease of 97,000 from the prior week's level, which was revised up by 9,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 782,000 initial claims for unemployment insurance, and the rate for unemployment claims was 7.2%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended September 18 were Puerto Rico (4.5%), Illinois (4.2%), California (3.1%), Hawaii (3.0%), New Jersey (2.9%), Nevada (2.8%), Alaska (2.7%), Oregon (2.7%), Louisiana (2.5%), and New York (2.5%). States and territories with the largest increases in initial claims for the week ended September 25 were California (+9,907), Michigan (+6,115), Texas (+4,625), the District of Columbia (+2,223), and Minnesota (+2,002), while the largest decreases were in Virginia (-7,245), Maryland (-5,617), Arizona (-4,241), Louisiana (-3,160), and Ohio (-2,853).

  • The number of new claims for unemployment insurance benefits rose for the third consecutive week. For the week ended September 25, there were 362,000 new claims for unemployment insurance, an increase of 11,000 from the previous week's level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 18 was 2.0%, a decrease of 0.1 percentage point from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended September 18 was 2,802,000, a decrease of 18,000 from the prior week's level, which was revised down by 25,000. For comparison, last year at this time, there were 803,000 initial claims for unemployment insurance, and the rate for unemployment claims was 7.8%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended September 11 were Puerto Rico (4.7%), California (3.4%), the District of Columbia (3.2%), Oregon (3.2%), Alaska (3.1%), Nevada (3.1%), New Jersey (3.1%), the Virgin Islands (3.1%), Hawaii (2.7%), and Illinois (2.7%). States and territories with the largest increases in initial claims for the week ended September 18 were California (+17,218), Virginia (+12,140), Ohio (+4,147), Oregon (+3,413), and Maryland (+2,452), while the largest decreases were in Louisiana (-6,935), New York (-2,275), Missouri (-1,568), Oklahoma (-1,264), and New Mexico (-1,055).

Eye on the Week Ahead

The latest reports on inflationary trends are available this week. Transitory or not, inflation has been rising for the past several months. The Consumer Price Index has risen 5.3%, the Producer Price Index is up 8.3%, import prices have increased 9.0%, and export prices have climbed 16.8%.

The Markets (as of market close October 1, 2021)

A rally last Friday helped drive stocks generally higher last week. The Dow, the Russell 2000, and the Global Dow were able to post gains, while the Nasdaq and the S&P 500 closed the week in the red. Declines in the market sectors were broad-based, with only energy (5.8%) climbing higher. Growth shares fared worse than value stocks, as evidenced by the dip in the tech-heavy Nasdaq. While the federal government averted a partial shutdown, no progress was made on raising the federal debt limit. Investors also saw the prospects of inflationary pressures continuing as supply constraints are driving production costs higher. Ten-year Treasury yields rose 13 basis points to 1.46%. Some analysts suggest that a spike in Treasury yields may be reflective of investors' expectations that the Federal Reserve could start tightening its monetary policies as early as November. Crude oil prices increased more than $5.00 per barrel. The dollar continued its bullish run, while gold prices dipped.

Stocks opened the week mixed, with the Dow, the Russell 2000, and the Global Dow gaining, while the Nasdaq and the S&P 500 lost value. The dollar and crude oil prices advanced. Bond prices slid, increasing the yield on 10-year Treasuries to 1.48%. Rising bond yields could weigh on growth stocks, particularly in the technology sector, which generally has low dividend yields. Energy and financials led the market sectors, while health care, information technology, utilities, and real estate dipped.

Stocks tumbled last Tuesday on growing concern over the debt-ceiling impasse in Washington. Technology shares underperformed, pulling the Nasdaq down 2.8% — its largest single-day decline since March. The Russell 2000 fell 2.3%, followed by the S&P 500 (-2.0%), the Dow (-1.6%), and the Global Dow (-1.1%). Ten-year Treasury yields reached 1.53%, a mark not approached since late June. The dollar rose for the second consecutive day, while crude oil prices fell. The market sectors declined, with information technology (-3.0%) and communication services (-2.8%) falling the furthest. Energy (0.5%) was the only sector to gain ground.

The market yielded mixed returns last Wednesday. Consumer staples, health care, utilities, and real estate helped push the large caps of the Dow (0.3%) and the S&P 500 (0.2%) higher, while a pullback in tech shares dragged the Nasdaq (-0.2%) lower. The Russell 2000 (-0.3%) and the Global Dow (-0.2%) also fell. Ten-year Treasury yields pushed higher, while the dollar climbed to its highest level since November 2020. Crude oil prices receded but remained well over $74.00 per barrel.

 

Equities dipped lower last Thursday, despite confirmation that Congress passed a nine-week spending bill to temporarily avert a U.S. government shutdown. Each of the indexes listed here closed in the red, led by the Dow (-1.6%), followed by the S&P 500 (-1.2%), the Russell 2000 (-0.9%), the Global Dow (-0.9%), and the Nasdaq (-0.4%). The dollar and 10-year Treasury yields fell, while crude oil prices rose. All of the market sectors declined, with industrials (-2.1%) and consumer staples (-1.9%) falling the furthest, while financials, materials, and real estate each fell 1.6%.

Stocks had their best day of the week last Friday, with dip-buying driving cyclicals higher. Investors got promising news about a new COVID-19 medication. Each of the indexes posted gains, led by the Russell 2000 (1.7%), followed by the Dow (1.4%), the S&P 500 (1.2%), the Nasdaq (0.8%), and the Global Dow (0.4%). Bond prices rose, pulling the yields on 10-year Treasuries lower. The dollar slid, while crude oil prices advanced. Energy (3.3%), communication services (1.8%), financials (1.6%), information technology (1.4%), and industrials (1.4%) led the market sectors.

The national average retail price for regular gasoline was $3.175 per gallon on September 27, $0.009 per gallon less than the prior week's price but $1.006 higher than a year ago. Gasoline production increased during the week ended September 24, averaging 9.9 million barrels per day. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ended September 24 — 67,000 barrels per day more than the previous week's average. Refineries operated at 88.1% of their operable capacity, up from the prior week's level of 87.5%.

Market/Index

2020 Close

Prior Week

As of 9/24

Weekly Change

YTD Change

DJIA

30,606.48
 34,258.32 34,326.46 0.20% 12.15%

Nasdaq

12,888.28

15,047.70 14,566.70
-3.20%

13.02%

S&P 500

3,756.07

4,395.64 4,357.04 -0.88%

16.00%

Russell 2000

 1,974.86 2,218.56

2,241.63

1.04% 13.51%

Global Dow

3,487.52

3,961.73

3,973.93 0.31%

 

13.95%

Fed. Funds target rate

0.00%-0.25%

0.00%-0.25%

0.00%-0.25%

0 bps

0 bps

10-year Treasuries

0.91%

1.33%

1.46%

13 bps

55 bps

US Dollar-DXY

89.84

93.27

94.04

0.83% 4.67%

Crude Oil-CL=F

$48.52 $70.51 $75.76 7.45% 56.14%

Gold-GC=F

$1,893.10

$1,768.40 $1,760.10 -0.47%

 

-7.03%
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • The economy accelerated at an annualized rate of 6.7% in the second quarter, according to the third and final estimate from the Bureau of Economic Analysis. GDP increased 6.3% in the first quarter. Contributing to the increase in GDP were upward revisions in personal consumption expenditures (12.0%) and exports (7.6%), which were partially offset by an upward revision to imports, which are a subtraction in the calculation of GDP. The increase in second-quarter GDP reflected continued economic recovery, reopening of establishments, and an ongoing government response related to the COVID-19 pandemic. In the second quarter, government assistance payments in the form of loans to businesses and grants to state and local governments increased, while social benefits to households, such as the direct economic impact payments, declined. The personal consumption price index, a measure of inflation, increased 6.5% in the second quarter. Excluding food and energy prices, the price index advanced 6.1%.

  • According to the latest report from the Bureau of Economic Analysis, personal income inched up 0.2% in August after rising 1.1% in July. The small August increase in personal income was likely impacted by a 3.7% decline in unemployment insurance benefits. Wages and salaries gained 0.5% (1.1% in July). Disposable (after-tax) income rose 0.1% in August after increasing 1.1% the prior month. Consumer spending increased 0.8% in August after dipping 0.1% in July. Prices for goods and services continued to rise in August, increasing 0.4%, the same advance as in July. Excluding food and energy, consumer prices rose 0.3% (0.3% in July). For the year ended in August, consumer prices have increased 4.3%.

  • New orders for durable goods increased 1.8% in August. This increase, up 15 of the last 16 months, followed a 0.5% rise in July. Transportation equipment, up three of the last four months, led the increase, climbing 5.5% in August. Excluding transportation, however, new orders edged up just 0.2%. Unfilled orders and inventories increased, while shipments decreased 0.5% following three consecutive monthly increases. New orders for motor vehicles and parts dipped 3.1% in August after advancing 5.3% in July. Orders for nondefense aircraft and parts jumped 77.9% in August after falling 36.3% the previous month. New orders for capital goods rose 6.7%, driven higher by a 9.0% increase in orders for nondefense capital goods. Defense capital goods fell 8.3%.

  • The advance report on international trade in goods revealed the trade deficit expanded by 0.9% in August. Exports of goods increased by 0.7%, while imports of goods grew by 0.8%. Since August 2020, exports have increased 25.6% and imports have climbed 17.8%.

  • According to the latest report from IHS Markit, the purchasing managers' index dropped to a five-month low in September, as production was hampered by material and labor shortages. The IHS Markit U.S. Manufacturing Purchasing Managers' Index™ (PMI™) posted 60.7 in September, down from 61.1 in August. While a reading above 50 indicates expansion, the rate of growth is slowing. As a result of supply-chain bottlenecks, backlogs of work have risen at the fastest pace on record. Prices continue to rise as the rate of input cost inflation, which softened only slightly from August's series record, caused firms to raise their charges at an unprecedented pace.

  • The number of new claims for unemployment insurance benefits rose for the third consecutive week. For the week ended September 25, there were 362,000 new claims for unemployment insurance, an increase of 11,000 from the previous week's level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 18 was 2.0%, a decrease of 0.1 percentage point from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended September 18 was 2,802,000, a decrease of 18,000 from the prior week's level, which was revised down by 25,000. For comparison, last year at this time, there were 803,000 initial claims for unemployment insurance, and the rate for unemployment claims was 7.8%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended September 11 were Puerto Rico (4.7%), California (3.4%), the District of Columbia (3.2%), Oregon (3.2%), Alaska (3.1%), Nevada (3.1%), New Jersey (3.1%), the Virgin Islands (3.1%), Hawaii (2.7%), and Illinois (2.7%). States and territories with the largest increases in initial claims for the week ended September 18 were California (+17,218), Virginia (+12,140), Ohio (+4,147), Oregon (+3,413), and Maryland (+2,452), while the largest decreases were in Louisiana (-6,935), New York (-2,275), Missouri (-1,568), Oklahoma (-1,264), and New Mexico (-1,055).

Eye on the Week Ahead

Employment figures for September are available at the end of this week. While the jobs sector has been steadily improving, the pace of new hires has slowed. Since June and July, when more than 900,000 new jobs were added each month, August saw a job increase of only 235,000. On the other hand, earnings have increased 4.3% since August 2020.

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. 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 of500 leading 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 indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2021.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

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