All Stop!!?? (Market Recap Week Ending September 3)
Market Performance Week Ending September 3
Dow 35,369 +308 or 0.88%
Nasdaq 15,363 +691 or 4.7%
S&P 4,535 +99 or 2.2%
U.S. 10 Year Treasury Yield 1.326%, +1.1 bp or 0.84%
Covid Hitting the Economy
The rising surge of Covid-19 infections, hospitalization and deaths is starting to affect the economy. The economic data turned from “goldilocks” to concerning in the matter of a week. All data points disappointed this week with the exception of initial jobless claims which were a touch better than expectations and the unweighted ISM Manufacturing survey which also beat expectations. The most anticipated number, August Nonfarm Payrolls, was a complete disaster on Friday (235,000 jobs created vs expectations of 720,000) leading to speculation that the Fed plan to taper asset purchases will be pushed from the conclusion of their meeting later this month to no earlier than the conclusion of their meeting in November. Next week multiple Fed Presidents will be speaking which should give the markets some insight as to the direction the Fed is leaning towards tapering.
Infections and deaths were higher again this week, although hospitalizations moderated. The daily average of new cases rose to 153,246, +4.9% vs the previous 7-day average. The 7-day moving average of deaths rose to 1,017, +3.7% vs the previous week. Hospitalizations fell to 12,156, down 1.7% from the prior average. On a hopeful note, vaccinations rose 3.3% to a daily average of 906,992 doses administered.
Market Data Points Next Week
Monday – Markets closed in observance of Labor Day.
Tuesday – None.
Wednesday – JOLTS. NY Fed President John Williams and Dallas Fed President Robert Kaplan speak.
Thursday – Initial Jobless Claims. Chicago Fed President Charles Evans, Dallas Fed President Kaplan, Boston Fed President Eric Rosengren and Minneapolis Fed President Neel Kashkari all speak.
Friday – None.
Last week’s trading…
Monday– Dow (56) to 35,399, Nasdaq +136 to 15,265 (record close), S&P +19 to 4,528 (record close).
- Fed Chair Powell’s Friday comments on tapering and interest rates continued to reverberate through the market today as the Nasdaq and S&P again set new closing highs.
- Seven of the eleven S&P sectors traded higher led by interest rate sensitive sectors Real Estate and Technology.
- The FANMAG trade pushed the Nasdaq higher; Facebook (FB) +2.15%, Amazon (AMZN) +2.15%, Netflix (NFLX) +1.3%, Microsoft (MSFT) +1.29%, Apple (APPL) +3.04%, and Alphabet (GOOG) +0.41%.
- Pending home sales fell precipitously; down 1.8% compared to July and down 8.5% year over year.
- The 10-year U.S. Treasury yield sank nearly 4 bp to 1.279%.
Tuesday – Dow (39) to 35,360, Nasdaq (6) to 15,019, S&P (6) to 4,486.
- All three indices fell slightly while consolidating Friday’s and Monday’s gains.
- Seven of the eleven S&P sectors traded lower, led by Energy (-0.73%) and Tech (-0.56%)
- Chicago August PMI dropped to 66.8 vs 73.4 in July.
- August Consumer Confidence missed expectations, printing at 113.8, the lowest since February, vs 125.1 in July and expectations of 124.0.
- The 10-year U.S. Treasury yield rose nearly 5 bp to 1.328%.
Wednesday – Dow (48) to 35,312, Nasdaq +50 to 15,309 (record close), S&P +10 to 4,524.
- Six of eleven S&P sectors traded higher: Real Estate led for the second consecutive day. Energy and Financials were the two worst performers.
- ADP Private Payrolls printed at 374,000 jobs created, missing expectations of 600,000. ISM Manufacturing PMI was 59.9 for August vs 59.5 in July. (as a reminder, the ISM survey gives equal weighting to the different sectors surveyed while Markit assigns different weightings to different sectors)
- August Markit Manufacturing PMI printed 61.1, down from July’s record setting 63.4 number.
Thursday – Dow +131 to 35,443, Nasdaq +21 to 15,331 (record close), S&P +12 to 4,536 (record close).
- Eight of eleven S&P sectors traded higher today, led by Energy, Healthcare and industrials.
- Jobless claims printed at 340,000 vs expectations of 345,000; this represents the lowest level since March of 2020.
- The 10-year U.S. Treasury yield settled at 1.301%.
Friday – Dow (74) to 35,369, Nasdaq +32 to 15,363 (record close), S&P (1) to 4,535.
- August Nonfarm Payrolls was a big disappointment at 235,000. Economists expected 720,000 jobs and August’s number is a huge decline from July’s revised number of 1.053 million jobs created.
- The 10-year U.S. Treasury yield inched up 2.5 bp to 1.326%.
- Only six of the eleven S&P sectors traded higher today led by Materials and Tech. Energy, Financials, Industrials and Utilities were amongst the worst performers.
P.S. If you know of any friends or family members who could benefit from our services and these types of communiques during these unique times, we are accepting new clients and offer a complimentary one-hour review.
Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets…Bitcoin, Cardano, Chainlink, Ethereum, ETHE, GBTC, and TSLA.