Last Week’s Summary
- S&P 500 Index fell 1.26%
- International Equities fell 1.40%
- Emerging Markets fell 1.17%
- U.S. 10-Year Treasury Yield rose to 4.26%
- Initial Jobless Claims fell to 216k
- Durable Goods Orders fell 5.2%
- Factory Orders fell 2.1%
What to Watch for This Week
- M, 9/11/23 NY Fed 1-Yr. Inflation Expectations
- W, 9/13/23 CPI, CPI Core, MBA Mortgage Applications
- Th, 9/14/23 Initial Jobless Claims, PPI, PPI Core
- F, 9/15/23 Empire Manufacturing, U. of Mich. Sentiment
Weekly Market Recap
U.S. equities faced a challenging week, driven by concerns about a Chinese ban on Apple Inc.’s iPhone and its potential impact on the technology sector. The tech industry has been a driving force behind this year’s market rally, fueled by excitement around artificial intelligence and speculation about the Federal Reserve’s impending conclusion of its interest-rate hikes.
However, the Nasdaq 100’s nearly 40% surge this year has raised questions about stretched valuations, indicating the potential for a correction. In the currency markets, every major currency weakened against the U.S. dollar over the past month, including heavyweights like the Chinese yuan and the Indian rupee, which are nearing record lows. This trend reflects the global economic divergence, with the U.S. showing signs of acceleration while growth cools in Europe and China.
The U.S. dollar’s remarkable rally has resulted in a record streak of weekly gains, as traders bet on the Federal Reserve’s commitment to keeping interest rates elevated, defying the prevailing global economic uncertainty. John Williams, President of the Federal Reserve Bank of New York, expressed confidence in the current state of U.S. monetary policy, describing it as “in a good place.”
However, officials are closely monitoring economic data to make informed decisions regarding interest rates. Solid jobless claims figures reinforced the case for maintaining higher rates, as applications for U.S. unemployment benefits fell to their lowest level since February.
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