Last Week’s Summary
- S&P 500 Index fell 2.05%
- International Equities fell 3.33%
- Emerging Markets fell 3.28%
- U.S. 10-Year Treasury Yield rose to 4.25%
- Initial Jobless Claims fell to 239k
- Retail Sales Advance rose to 0.7%
What to Watch for This Week
- T, 8/22/23 Existing Home Sales
- W, 8/23/23 MBA Mortgage Applications, S&P Global US Manufacturing PMI, New Home Sales
- Th, 8/24/23 Initial Jobless Claims, Chicago Fed Nat Activity Index
- F, 8/25/23 U. of Mich. Sentimen
Weekly Market Recap
Megacap tech stocks faced a challenging third consecutive week, marking the lengthiest downturn thus far in 2023. This decline was largely attributed to growing concerns about rising global interest rates, which cast a shadow over market sentiment.
However, there was a notable rebound in bond prices after they had recently touched multiyear lows. While the immediate fear of an impending recession has subsided, cautious investors find themselves grappling with persistent inflationary pressures and the looming possibility of further policy tightening.
Bond markets witnessed a resurgence on Friday, driven by speculation that previous losses may be overdone. In the realm of treasuries, the yield on the 10-year bond retreated from Thursday’s levels, which had been inching towards the highest seen since 2007. Markets are currently on edge as they anticipate the annual gathering of policymakers in Jackson Hole, Wyoming, scheduled for this upcoming week. Traders are eagerly awaiting insights into the Federal Reserve’s outlook for their upcoming meetings.
This anticipation was further fueled by the release of the FOMC meeting minutes from the July session earlier this week, reigniting concerns that the Fed is not finished with its rate hikes.
The central bank appears committed to its vigilant stance in combatting inflation, remaining prepared to resume rate hikes depending on economic data. Reflecting the prevailing unease in the markets, the CBOE Volatility Index (VIX), a popular gauge of equity volatility, reached its highest level since May.
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