Last Week’s Summary
- S&P 500 Index fell 4.22%
- International Equities fell 2.64%
- Emerging Markets fell 2.24%
- U.S. 10-Year Treasury Yield fell to 3.71%
- Initial Jobless Claims fell to 227k
- Nonfarm Payrolls rose 142k
- Unemployment Rate fell to 4.2%
What to Watch for This Week
- M, 9/9/24 Consumer Credit, Wholesale Inventories
- T, 9/10/24 NFIB Small Business Optimism
- W, 9/11/24 Consumer Price Index
- Th, 9/12/24 Producer Price Index, Initial Jobless Claims
- F, 9/13/24 Import Price Index, U. Michigan Sentiment
Weekly Market Recap
The S&P 500 and Nasdaq 100 posted their worst weekly performance since March 2023, marking their weakest September starts since 2015 and 2002, respectively. Concerns have shifted from inflation to signs of economic weakness, which may push the Federal Reserve to ease policy sooner than expected.
However, rate cuts designed to prevent a recession might not provide the typical boost to equities. Nonfarm payrolls rose by 142,000 last month, the lowest three-month average since mid 2020, while the unemployment rate edged down to 4.2%.
Traders are now pricing in over two percentage points in rate cuts over the next year, the steepest drop outside a recession since the 1980s. Many anticipate at least a quarter point easing in September, with some betting on a larger move.
Economic data leading up to the jobs report was mixed. U.S. services expanded modestly, while unemployment claims fell short of estimates. Additionally, manufacturing activity contracted for a fifth consecutive month, signaling continued weakness in the sector.
In commodities, oil prices inched higher as OPEC+ delayed a planned supply hike by two months, but this failed to reverse earlier losses driven by fragile demand. Gold held onto its gains as traders processed the latest economic data.
Meanwhile, China faces potential new export controls from the Biden administration, aiming to curb access to advanced technologies. The upcoming Federal Reserve meeting could further shape market direction in the weeks ahead.
60-Second Breakdown: September 9, 2024
Michael C. Sasaki, CFA®, discusses recent market performance and explains this week’s chart. Watch Loom.
