The market did not like several key corporate earnings announcements last week.
The Jobs Report will be eyed this week to see if the economy is holding up among renewed interest rate concerns. There is a divergence between economic data and investor confidence. Third quarter GDP data came in stronger than expected and more than double the rate of growth over the previous quarter. The Fed’s favorite measure of inflation, the PCE Price Index was flat year-over-year for the past 3 months. Both the Fed’s National Financial Conditions Index and the Financial Stress Index show loose financial conditions.
The primary concern appears to be over interest rates.
Since July 31st, the performance of the S&P 500 Index has proceeded lower as the yield on the 10-year Treasury has moved higher. Another pause by the Fed at this week’s FOMC meeting could help shift that dynamic. Current futures on the Fed’s next move point to a 97% probability of no rate hike and a 3% probability of a rate cut. Personal Spending released last week shows a still strong consumer. Markets are at an inflection point that may resolve itself soon.
Disclosures
The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.
Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
Past Performance does not guarantee future results.
Comments