Market Indexes: It was a down week, with the Tech-heavy NASDAQ pulling back the most. Friday saw a rebound—a welcome change after the September pullback.
“Wall Street stocks ended sharply lower on Tuesday in a broad sell-off driven by rising U.S. Treasury yields, deepening concerns over persistent inflation, and contentious debt ceiling negotiations in Washington. All three major U.S. stock indexes slid nearly 2% or more, with interest rate sensitive tech and tech-adjacent stocks weighing heaviest as investors lost their risk appetite. It was the S&P 500 index’s biggest one-day percentage drop since May, and the Nasdaq’s largest since March.” (Reuters)
Volatility: The VIX rose 19% this past week, ending at $21.15, after rising 40% in September.
High Dividend Stocks: These high dividend stocks go ex-dividend this week: AT&T (NYSE:T), Manhattan Bridge Capital (NASDAQ:LOAN), Eagle Point Cred (NYSE:ECC), and Invesco Mortgage Capital (NYSE:IVR).
Market Breadth: 8 out of 30 DOW stocks rose last week, vs. 14 week before last. 30% of the S&P 500 rose, vs. 56% the week before last.
FOREX: The US $ rose vs. other major currencies this week, except the loonie and aussie.
Economic News
Reuters reports:
“New orders and shipments of key U.S.-made capital goods increased solidly in August amid strong demand for computers and electronic products, keeping business spending on equipment on track for another quarter of robust growth. Core capital goods orders rose 0.5%; Core capital goods shipments rose 0.7%; and Durable goods orders surged 1.8%; unfilled orders up 1.0%.
“The number of Americans filing new claims for jobless benefits rose further last week amid another increase in California, but the labor market recovery remains intact, with unemployment rolls steadily shrinking in mid-September. Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 362,000 for the week ended Sept. 25.
"Economists polled by Reuters had forecast 335,000 applications for the latest week. Claims have been rising, with economists blaming a range of factors including wildfires in California and the lingering effects of Hurricane Ida, which struck the Gulf Coast in late August and caused record flooding in New York and New Jersey in early September.
"The latest wave of coronavirus infections could also have caused some companies in the high contact services sectors to layoff workers. The upheaval caused by the pandemic has also made it harder to adjust the data for seasonal fluctuations.
Unadjusted claims, which economists say offer a better read of the labor market, fell 8,326 to 298,255 last week.”
Week Ahead Highlights
“Stocks and bonds could take cues in the coming week from developments in Washington, where lawmakers continue to debate an infrastructure spending package, as well as next Friday’s monthly U.S. jobs report. Among the indicators investors are using to gauge stocks’ future trajectory is the spread between the yields on two-year and 10-year Treasuries. Some view this as a barometer of whether the economy is slowing or overheating.” (Reuters)
Coming Week’s US Economic Reports
Sectors: Energy led by a wide margin again this past week, with Healthcare falling the most.
Futures: WTI crude rose 2.38%, ending at $75.74, its highest close since July.
