Falling bond yields–spurred by weak economic data–helped lift stocks to weekly gains.
The Dow Jones Industrial Average advanced 1.43%, while the Standard & Poor’s 500 gained 2.50%. The Nasdaq Composite index increased 3.25% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, picked up 2.71%.1,2,3
Stocks Rise on Slowing Economy
Investor sentiment turned positive last week as signs of economic softness were interpreted as reason for the Fed to hold off on further rate hikes. A downward revision of Q2 economic growth and fresh signs of a cooling labor market reversed the recent rise in bond yield. They helped trigger a stock bounceback following Fed Chair Powell’s speech at Jackson Hole the previous Friday.
It wasn’t all about bad news being viewed as good news, though. A series of solid earnings reports, an announcement by one mega-cap tech name introducing pricing for its AI tools, and fresh inflation data–in-line with market expectations–further boosted enthusiasm for stocks.
Signs of Labor Cooling
Despite historic monetary tightening, the labor market has exhibited remarkable resilience, but last week’s employment data showed a cooling trend.
Job openings declined to their lowest level since March 2021, though they remained above pre-pandemic levels. Meanwhile, a survey of private sector hiring showed a slowdown in hiring, with employers adding 177,000 jobs in August–below the 371,000 added in July and short of economists’ forecast of 200,000.4,5
Finally, the government’s monthly employment report showed the number of nonfarm payroll gains continued to decelerate in August, while June and July estimates were revised lower by 110,000.6
This Week: Key Economic Data
Tuesday: Factory Orders.
Wednesday: Institute for Supply Management (ISM) Services Index.
Thursday: Jobless Claims.
Friday: Consumer Credit.
Source: Econoday, September 1, 2023
This Week: Companies Reporting Earnings
Tuesday: Zscaler, Inc. (ZS)
Thursday: DocuSign (DOCU)
Friday: The Kroger Co. (KR)
Source: Zacks, September 1, 2023
"When people are friends, they have no need of justice, but when they are just, they need friendship in addition."
Protect Your Tax Data
Protecting your data is very important in today's digital age. The Internal Revenue Service shared guidelines tax pros should follow to protect taxpayer data. But these are also great guidelines for individuals.
Anti-virus software: This software scans computer files for malicious software, or malware, on the device. Anti-virus vendors find new issues and update malware daily. Always install the latest updates of the software on your computer.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Tips for Eating Less Salt
Sodium isn’t completely bad for our bodies, but too much can increase blood pressure and cause stress on the heart and blood vessels. Because of this, it’s essential to monitor your sodium intake and be aware of how much sodium is in your foods.
If you want to tackle cutting back on sodium, choose unprocessed or minimally processed foods. Prepared foods are generally high in added sodium compared to fresh options. Cut back on sources of high sodium, such as pepperoni pizza, white bread, processed cheese, deli meat, hot dogs, and other red meat and processed foods. Instead, eat more fruits, veggies, and whole grains, all lower in sodium.
You enter a college classroom with 13 22-year-olds, 10 21-year-olds, and 14 20-year-olds. How many people are in the room?
Last week’s riddle: At a picnic, a photo has to be taken that depicts 6 children, 4 grandchildren, 2 brothers, 2 sisters, 3 sons, 3 daughters, 2 fathers, 2 mothers, 1 grandfather, 1 grandmother, 1 daughter-in-law, 1 mother-in-law, and 1 father-in-law. What is the smallest number of people that could appear in the photo? Answer: 8 - 4 young children, 2 of each gender; the children's mother and father, and the children's maternal grandmother and paternal grandfather.
Footnotes and Sources
2. The Wall Street Journal, August 25, 2023
3. The Wall Street Journal, August 25, 2023
4. The Wall Street Journal, August 29, 2023.
5. CNBC, August 30, 2023.
6. The Wall Street Journal, September 1, 2023.
7. IRS.gov, 2023
8. Harvard Medical School, April 24, 2023
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The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The 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. Past performance does not guarantee future results.
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Weekly Market Insights: September Stocks Open In Positive Territory
September 04, 2023