Stock Market News: 12-4-21

Market Indexes: It was a volatile week, with all 4 indexes retreating, as the market was rocked by hawkish comments from the Fed, the uncertainty of the Omnicom virus variant, and a weaker than expected jobs report, although the unemployment rate plunged to a 21-month low of 4.2%.

Volatility: The VIX rose 7.5% this week, ending the week at $30.76, its first close above $30 since January.

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Market Breadth: 3 DJIA stocks rose this week, vs. 5 last week. 11% of the S&P 500 rose, vs. 17% last week.

FOREX: The US $ gained vs. the Pound, the Loonie, and the Aussie & NZ $ again this week, and fell vs. the Yen, Swiss Franc, and the Euro.

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Economic News: “Jerome H. Powell, the Federal Reserve chair, signaled that the central bank is growing more wary of high — and stubborn — inflation, and that it could speed up its plan to withdraw economic support as soon as its meeting in December as it tries to make sure that rapid price gains do not last.
The Fed had been buying $120 billion in government-backed securities each month for much of the pandemic to bolster the economy by keeping money flowing in financial markets. In November, officials announced plans to slow those purchases by $15 billion per month. That would have ended the program mid-way through 2022. But Mr. Powell signaled on Tuesday that the process could speed up, cutting down on how much juice the Fed will add to demand in upcoming months.

“At this point, the economy is very strong, and inflationary pressures are high,” Mr. Powell said during a hearing before the Senate Banking Committee. “It is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner.”
Mr. Powell said that the Fed will discuss slowing bond purchase faster “at our upcoming meeting in a couple of weeks” — stressing that between now and then, the Fed will get a better sense of the new Omicron variant of the coronavirus, a fresh labor market report and a new reading on consumer price inflation.
The Fed’s next two-day policy meeting will take place Dec. 14-15.” (NY Times)
“The survey of businesses showed non-farm payrolls increased by 210,000 jobs last month. Data for October was revised up to show employment rising by 546,000 jobs instead of 531,000 as previously reported. That left employment 3.9 million jobs below its peak in February 2020.
“Don’t be fooled by the measly payroll jobs gain this month because the economy’s engines are actually in overdrive as shown by the plunge in joblessness,” said Christopher Rupkey, chief economist at FWDBONDS in New York.
“While that still indicates that the economy is about 10 months away from closing the total payrolls employment gap, the unemployment rate is closing at a relatively rapid rate to the Federal Reserve’s estimate of full unemployment,” said Brian Bethune, professor of practice at Boston College.” (Reuters)

(MarketWatch)


Week Ahead Highlights:
There will be several consumer and inflation-related reports due out next week.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Utilities led this week, with Communications Services lagging. Energy remains the leading sector in 2021.

Futures: WTI Crude fell -2.85% this week, ending at $66.55.

Stock Market News: 11-27-21

Market Indexes: All 4 indexes retreated this week, with Friday seeing a big selloff, as news of another virus variant rattled investors. The DOW had its worst day the year and its third worst Black Friday selloff ever on Friday.

Volatility: The VIX rose 60% this week, ending the week at $28.62.

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Market Breadth: 5 DJIA stocks rose this week, vs. 24 last week. 17% of the S&P 500 rose, vs. 35% last week.

FOREX: The US $ gained vs. the Pound, the Loonie, and the Aussie & NZ $ this week, and fell vs. the Yen, Swiss Franc, and the Euro.

“The dollar hit fresh 16-month highs against the euro on Wednesday as investors priced for the prospect that the Federal Reserve will begin hiking rates in mid-2022 while the European Central Bank is expected to remain more dovish as growth in the region lags.” (Reuters)

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Economic News: “Initial Unemployment Claims fell last week to their lowest point since 1969, the Labor Department reported Wednesday. New filings for state benefits totaled 199,000 on a seasonally adjusted basis, a decline of 71,000 from the previous week.
The drop marks a milestone in the economy’s recovery from the pandemic. Weekly claims peaked at more than 6 million in April 2020, as the coronavirus forced businesses and consumers alike to shut down. As recently as early January, amid a winter resurgence of the coronavirus, new state claims exceeded 900,000 in one week. Filing for unemployment benefits has come down sharply since then, but remained well above pre-pandemic levels until very recently.
Despite a summer lull, the economy has been showing signs of life lately.Employers added 531,000 jobs in October, and most economists expect growth to pick up in the final quarter of the year, boosted by healthy consumer spending.
“Today’s data reinforce the historic economic progress we are making and the importance of building on that progress in the weeks ahead,” President Biden said in a statement about the unemployment claims report.
As one measure of progress, Mr. Biden pointed to the most recent tally of unemployment benefits of all sorts, from early November, which showed the number of people with continuing claims — those filing for benefits who have already filed an initial claim — at 2.4 million. The figure right before Thanksgiving last year was more than 20 million.” (NY TImes)
“In an attempt to reduce global energy prices, the White House will release 50 million barrels of crude oil along with Britain, China, India, Japan and South Korea. The Department of Energy’s release of the reserves, which is set to be detailed in remarks by Mr. Biden on Tuesday afternoon, is meant to address fluctuations in supply and demand for oil, administration officials said.

The price of oil has fallen since late October partly in anticipation that countries would take action to try to tame energy costs. The U.S. benchmark, West Texas Intermediate, immediately jumped after the administration’s announcement but then slipped to 0.4 percent lower for the day. So far this month, the price had dropped 4.75 percent.
Demand for oil fell precipitously in the early months of the pandemic, so oil-producing nations cut output. In the United States, reduced demand led to a substantial decline in drilling; the country’s oil rig count was down nearly 70 percent in summer 2020.
A coordinated release would probably be considered a challenge by members of OPEC Plus, and could prompt a response next week when the group holds its next monthly meeting.
In recent monthly meetings, the OPEC group has stuck with plans to increase production by a relatively modest 400,000 barrels a day each month. Asked about a potential response from OPEC Plus, U.S. officials said on Tuesday that the administration had worked for weeks to rally other oil-producing countries to agree to tap into their stockpiles to ensure a parallel release, which was a preference of Mr. Biden’s.
The average price of a gallon of regular gasoline in the US had risen to $3.40 on Tuesday from $2.11 a year ago, according to AAA, the travel services organization. But gas prices have started to level off in the past week.” (NY Times)


(MarketWatch)

Week Ahead Highlights:
The heavily-watched Non-Farm Payrolls report for Navember will be released next Friday am.Economists are forecasting 581,000 jobs to have been added in November.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Energy led this week, the only sector having positive gains, despite the Friday selloff, with Consumer Discretionary lagging again.

Futures: WTI Crude fell -10% this week, ending at $68.17.
“Oil fell sharply as a new coronavirus strain raised concerns about the outlook for demand and sent global markets spiraling. The emergence of the new strain represents the biggest threat to the recovery in oil consumption for several months, with several governments tightening restrictions on travel from countries in southern Africa. Global markets sold off heavily, as traders fled to haven assets.
The price plunge is the latest dramatic twist ahead of a key OPEC+ meeting next week. While the gathering was already set to be keenly watched, after an alliance of consumers announced the release of emergency supply earlier this week, the potential severity of the new coronavirus variant is the latest factor that the group will have to tackle when deciding whether to lift output.” (Bloomberg)

Stock Market News: 11-13-21

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Market Indexes: All 4 indexes retreated this week, ending a 5-week streak of weekly advances, as inflation fears, Fed tapering, and lower consumer sentiment gave investors pause.

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Volatility: The VIX fell -1% this week, ending the week at $16.29.

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Market Breadth: 11 DJIA stocks rose this week, vs. 11 last week. 52% of the S&P 500 rose, vs. 62% last week.

FOREX: The US $ gained vs. most other major currencies again this week.

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Economic News: “The producer price index for final demand rose 0.6% last month after climbing 0.5% in September, the Labor Department said on Tuesday. That reversed the slowing trend in the monthly PPI since spring. In the 12 months through October, the PPI increased 8.6% after a similar gain in September. More than 60% of the increase in the PPI last month was due to a 1.2% rise in the prices of goods, which followed a 1.3% jump in September. A 6.7% surge in gasoline prices accounted for a third of the rise in goods prices. There were increases in the prices of diesel, gas and jet fuel as well as plastic resins.
Wholesale food prices dipped 0.1% as the cost of beef and veal tumbled 10.3%. Prices for light motor trucks fell as the government introduced new-model-year passenger cars and light motor trucks into the PPI.Exorbitant motor vehicle prices have accounted for much of the surge in inflation as a global semiconductor shortage linked to the nearly two-year long COVID-19 pandemic has forced manufactures to cut production, leaving virtually no inventory. ” (Reuters)

“U.S. consumer prices accelerated in October as Americans paid more for gasoline and food, leading to the biggest annual gain in 31 years, more signs that inflation could stay uncomfortably high well into 2022 amid snarled global supply chains. Inflation pressures are also brewing in the labor market, where an acute shortage of workers is driving wages higher.
The number of Americans filing claims for unemployment benefits fell to a 20-month low last week. The consumer price index jumped 0.9% last month after climbing 0.4% in September, the Labor Department said. The largest gain in four months hoisted the annual increase in the CPI to 6.2%. That was the biggest year-on-year rise since November 1990 and followed a 5.4% advance in September.
Food prices advanced 0.9%, mostly driven by meat, eggs, fish, vegetables, cereals and bakery products. It also cost more to eat away from home. But prices for alcoholic beverages fell. Excluding the volatile food and energy components, the CPI gained 0.6% last month after climbing 0.2% in September.
The so-called core CPI was boosted by rents, with owners’ equivalent rent of primary residence, which is what a homeowner would receive from renting a home, rising a solid 0.4%.The cost of hotel and motel accommodation rose 1.5%.
Prices for used cars and trucks rebounded 2.5% after declining for two straight months. New motor vehicle prices increased 1.4%, marking the seventh consecutive month of gains. A global semiconductor shortage has undercut motor vehicle production.Healthcare costs increased 0.5%, the largest gain in 17 months.
Consumers also paid more for household furnishings, recreation and grooming. The costs of motor vehicle insurance and apparel were unchanged. Air fares fell 0.7%.The so-called core CPI jumped 4.6% on a year-on-year basis, the largest increase since August 1991, after being steady at 4.0% for two straight months.” (Reuters)

“The University of Michigan’s Consumer Sentiment Index dropped to 66.8 in its preliminary November reading, the lowest level since November 2011, from October’s final reading of 71.7.” (Reuters)


(MarketWatch)

Week Ahead Highlights:
There will be several Housing-related reports due out next week, including the Homebuilders Index, Building Permits, and Housing Starts. Walmart, Target, Home Depot, and Macy’s Inc are among the high profile retailers expected to report next week.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Basic Materials led this week, with Consumer Discretionary lagging.

Futures: WTI Crude fell -0.5% this week, ending at $80.69.

Stock Market News: 11-6-21

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Market Indexes: All 4 indexes advanced again this week, with the Russell small caps leading with a 6% surge, followed by the NASDAQ, which was up 3%.
“Wall Street’s main indexes scored record closing highs on Friday and booked solid gains for the week following a strong U.S. jobs report and positive data for Pfizer’s experimental pill against COVID-19.
The S&P 500 and the Nasdaq notched record high closes for their seventh straight sessions, while the Dow Jones Industrial Average also closed at a record. All 3 indexes posted weekly gains for their fifth straight weeks.” (Reuters)

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Volatility: The VIX rose 1.4% this week, ending the week at $16.48.

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Market Breadth: 21 DJIA stocks rose this week, vs. 17 last week. 62% of the S&P 500 rose, vs. 53% last week.

FOREX: The US $ gained vs. most other major currencies this week, except the Yen, the Swiss Franc, and the Euro.

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Economic News: “The Federal Reserve on Wednesday said it will begin trimming its monthly bond purchases in November with plans to end them in 2022, but held to its belief that high inflation would prove “transitory” and likely not require a fast rise in interest rates.
However, the U.S. central bank nodded to global supply difficulties as adding to inflation risks, saying that those factors “are expected to be transitory,” but would need to ease to deliver the anticipated drop in inflation. “As the pandemic subsides, supply-chain bottlenecks will abate and job growth will move back up,” Fed Chair Jerome Powell said in a news conference after the release of the central bank’s latest policy statement. “And as that happens, inflation will decline from today’s elevated levels. Of course, the timing of that is highly uncertain.”

Yet even in announcing a $15 billion monthly cut to its $120 billion in monthly purchases of Treasuries and mortgage-backed securities (MBS), the Fed did little to signal when it may begin the next phase of policy “normalization” by raising interest rates.

“Economic activity and employment have continued to strengthen,” the policy-setting Federal Open Market Committee said in the statement, but did not change its intent to leave its benchmark overnight interest rate near zero until inflation had hit 2% and was “on track to moderately exceed 2% for some time.” (Reuters)

“The American economy added 531,000 jobs in October, a sharp rebound from the prior month and a sign that employers are feeling more optimistic as the latest coronavirus surge eases. The October gain was an improvement from the 312,000 positions added in September — a number that was revised upward on Friday. The labor force participation rate — the share of the working-age population employed or looking for a job — was flat in October, while the prime age (25 to 54) rate improved slightly to 81.7%.  The unemployment rate fell to 4.6% from 4.8% in September.” (NY Times)

“The Institute for Supply Management said on Wednesday its non-manufacturing activity index vaulted to a reading of 66.7 last month. That was the highest since the series started in 1997 and followed a 61.9 reading in September. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of U.S. economic activity. The survey’s measure of new orders received by services businesses soared to a record 69.7 last month from 63.5 in September. Spending is shifting from goods to services, thanks to vaccinations against the coronavirus.
Part of the better-than-expected services sector index reading reflected longer delivery times. The survey’s measure of supplier deliveries accelerated to a reading of 75.6 from 68.8 in September. A reading above 50 indicates slower deliveries.” (Reuters)

“Better-than-expected third-quarter earnings have helped lift sentiment for equities. With about 360 companies having reported, S&P 500 earnings are expected to have climbed 40.4% in the third quarter from a year earlier.” (Reuters)


(MarketWatch)

Week Ahead Highlights: There will be several inflation-related reports due out next week, including the PPI, anf the CPI, in addition to the Consumer Sentiment index.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Consumer Discretionary led again this week, with Healthcare and Financials lagging.

Futures: WTI Crude fell -2.44% this week, ending at $81.39.

Stock Market News: 10-23-21

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Market Indexes: It was another positive week, with all 4 indexes advancing at least 1%, led by the S&P, which rose 1.64%. Thus far, October has been a big month for market gains. The Dow set a record closing high on Friday, taking out a previous record close from August 16th.
“Analysts increased their expectations for S&P 500 earnings growth for the third quarter, forecasting an increase of 34.8% year-on-year, up from an expected 31.9% rise at the beginning of the week, according to data from Refinitiv.Data showed U.S. business activity accelerated in October, as COVID-19 infections subsided, though labor and raw material shortages held back manufacturing.” (Reuters)

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Volatility: The VIX fell 4.5% this week, ending the week at $15.43.

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Market Breadth: 22 DJIA stocks rose this week, vs. 22 last week. 78% of the S&P 500 rose, vs. 75% last week.

FOREX: The US $ fell vs. most other major currencies again this week.

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Economic News: “China’s economy increased by 4.9 percent in the third quarter, compared to the same period last year; the period was markedly slower than the 7.9 percent increase the country notched in the previous quarter. Industrial output, the mainstay of China’s growth, faltered badly, especially in September, posting its worst performance since the early days of the pandemic.
Two bright spots prevented the economy from stalling. Exports remained strong. And families, particularly prosperous ones, resumed spending money on restaurant meals and other services in September, as China succeeded once again in quelling small outbreaks of the coronavirus. Retail sales were up 4.4 percent in September from a year ago.
Chinese officials are showing signs of concern, although they have refrained so far from unleashing a big economic stimulus. Now, real estate — in particular, the debt that developers and home buyers amassed — is a major threat to growth. The country’s biggest developer, China Evergrande Group, faces a serious cash shortage that is already rippling through the economy.
Construction has ground to a halt at some of the company’s 800 projects as suppliers wait to be paid. Several smaller developers have had to scramble to meet bond payments. This could create a vicious cycle for the housing market. The worry is that developers may dump large numbers of unsold apartments on the market, keeping home buyers away as they watch to see how far prices may fall.” (NY TImes}

“U.S. homebuilding unexpectedly fell in September and permits dropped to a one-year low amid acute shortages of raw materials and labor, strengthening expectations that economic growth slowed sharply in the third quarter.
The report from the Commerce Department on Tuesday also showed housing completions hitting a 13-month low. It followed on the heels of news on Monday that production at U.S. factories fell by the most in seven months in September. Strong demand as global economies emerge from the COVID-19 pandemic is running against worker shortages, straining supply chains.
Housing starts dropped 1.6% to a seasonally adjusted annual rate of 1.555 million units last month, the lowest level since April. Data for August was revised down to a rate of 1.580 million units from the previously reported 1.615 million units. Lumber prices are rising again after tumbling from record highs set in May. Building materials, like windows and electric breaker boxes, are in short supply. The pandemic has upended labor market dynamics.
Starts have declined from the 1.725 million unit-pace level scaled in March, which was more than a 14-1/2-year high.
Single-family starts, which account for the largest share of the housing market, were unchanged at a rate of 1.080 million units last month. Single-family starts fell in the Northeast and the densely populated South, but rose in the West and Midwest. Starts for buildings with five units or more dropped 5.1% to a rate of 467,000 units last month.
Permits for future homebuilding plunged 7.7% to a rate of 1.589 million units in September. Single-family permits fell 0.9% to a rate of 1.041 million units. Permits for buildings with five units or more plummeted 21.0% to a rate of 498,000 units.

Housing completions dropped 4.6% to a rate of 1.240 million units last month. Single-family home completions were unchanged at a rate of 953,000 units. The inventory of previously owned homes is near record lows, leading to record double-digit annual growth in home prices. Realtors estimate that single-family housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to close the inventory gap. ” (Reuters)


(MarketWatch)

Week Ahead Highlights: Q3 ’21 earnings season heats up, with 10 DKIA stocks reporting, including AAPL and MSFT. 32% of the S&P 500 will report, including AMZN, XOM, CMCSA, and KO.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Real Estate and Healthcare led this week, with Communications Services lagging once again.

Futures: WTI Crude rose 2.33%, ending at $83.97, yet another 7-year high, its highest close since 2014.

Stock Market News: 10-16-21

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Market Indexes: It was another up week, with good earnings from major banks, and ongoing stronger energy prices supporting the market. The DOW had its biggest rise since June, and the S&P had its biggest rise since July.

“Wall Street’s main indexes rallied on Thursday, boosted by technology stocks and strong quarterly results from Bank of America and Walgreens, while better-than-expected economic data eased some concerns about higher inflation. Citigroup, Bank of America, and Morgan Stanley topped quarterly earnings estimates, helped by release of more reserves to cover loan losses, with torrid dealmaking, equity financing and trading activity adding to their profits.
Analysts expect corporate America to report strong quarterly profit growth and will focus on commentary from companies on how they are going to battle rising costs, labor shortages and supply chain disruptions. Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell close to a 19-month low last week, while a separate report showed producer prices eased in September.” (Reuters)

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Volatility: The VIX fell 8.6% this week, ending the week at $16.15.

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Market Breadth: 22 DJIA stocks rose this week, vs. 25 last week. 75% of the S&P 500 rose, vs. 82% last week.

FOREX: The US $ fell vs. other major currencies this week, except the Yen.

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Economic News: “Analysts predict that earnings for companies in the S&P 500 rose nearly 28 percent in the third quarter, compared with a year ago, which would be the third-highest increase since 2010. But that’s not necessarily a positive sign for the overall economy.
The sectors showing the biggest jumps in earnings are the few that benefit the most from inflation. Companies in the energy and materials sectors — like Exxon and Dow — are expected to report huge jumps in profits for the third quarter. By contrast, companies that are reluctant to pass higher costs onto consumers, like Amazon and General Motors, are expected to have a disappointing quarter. Banks are in the middle, with trading businesses expected to fall short of last year’s windfall but consumer divisions picking up as the economy reopens.
On the most recent earnings calls at S&P 500 companies, some 70 percent warned that supply chain issues would be a negative factor for sales and profits.” (NY TIMES)

“U.S. House of Representatives gave final approval on Tuesday to a Senate-passed bill temporarily raising the government’s borrowing limit to $28.9 trillion, putting off the risk of default at least until early December. Democrats, who narrowly control the House, maintained party discipline to pass the hard-fought, $480 billion debt limit increase by 219-206. The vote was along party lines, with every yes from Democrats and every no from Republicans. Republicans insist Democrats should take responsibility for raising the debt limit because they want to spend trillions of dollars to expand social programs and tackle climate change. Democrats say the increased borrowing authority is needed largely to cover the cost of tax cuts and spending programs during former Republican President Donald Trump’s administration, which House Republicans supported.” (Reuters)

“Consumer prices jumped more than expected last month, data released on Wednesday showed, raising the stakes for the White House and Federal Reserve as they continue to wager that rapid inflation will cool as the economy returns to normal.
The Consumer Price Index climbed 5.4 percent in September when compared with the prior year, more than expected in a Bloomberg survey of economists and faster than its 5.3 percent increase through August. From August to September, the index rose 0.4 percent, also above expectations. The September gains came as food — especially meat and eggs — cost consumers more. Housing prices also accelerated, something that raised alarm bells among many economists. Shelter is an important part of overall inflation and upward pressure in that index tends to last for some time.” (Reuters)


(MarketWatch)

Week Ahead Highlights: Q3 ’21 earnings season ramps up, with 7 DJIA stocks reporting, including JNJ, PG, VZ, and AXP. Housing, Mfg. and Industrial reports are due out next week.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Basic Materials led this week, with Communications Services lagging again.

Futures: WTI Crude rose 4.17%, ending at $82.66, another 7-year high, its highest close since 2014.

Stock Market News: 10-09-21

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Market Indexes: It was an up week, supported by a debt ceiling deal, and surging Energy prices, as oil and natural gas both hit 7-year highs.
“Stocks rebounded this week after Monday’s losses left the S&P 500 down 5.2% from its record high hit in September. A truce in the U.S. Congress to avoid a debt default provided some relief, but investors remain worried about inflation, higher U.S. Treasury yields and the Federal Reserve’s plan to unwind its easy money policies.” (Reuters)

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Volatility: The VIX fell 11% this week, ending the week at $18.77.

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Market Breadth: 25 out of 30 DOW stocks rose this week, vs. 8 last week. 82% of the S&P 500 rose, vs. 30% last week.

FOREX: The US $ fell vs. other major currencies this week, except the Aussie $, the Euro, and the Yen.

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Economic News: “The U.S. economy created the fewest jobs in nine months in September amid a drop in hiring at schools and worker shortages, but ebbing COVID-19 cases and the end of generous unemployment benefits could boost employment gains in the months ahead. The unemployment rate of 4.8% was down four-tenths of percentage point, while average hourly earnings increased 0.6%.
Non-farm payrolls increased by 194,000 jobs last month. Data for August was revised to show 366,000 jobs created instead of the previously reported 235,000 positions. Employment is 5.0 million jobs below its peak in February 2020. Employment gains were restrained by a 161,000 decline in state and local government payrolls. Private education jobs fell by 19,000. Most back-to-school hiring typically occurs in September, but recruitment last month was lower than usual, resulting in a decline after stripping seasonal fluctuations from the data.
Pandemic-related staffing fluctuations in public and private education have distorted the normal seasonal patterns, making it difficult to interpret the data, the government said. Overall, government payrolls fell by 123,000 jobs last month. That was offset by a 317,000 increase in private payrolls.
Employment in leisure and hospitality rose by 74,000 in September, but hiring at restaurants and bars little changed for the second straight month. Professional and business services payrolls rose by 60,000 jobs. Retailers hired 56,000 workers, while manufacturing added 26,000 jobs.
Economists polled by Reuters had forecast payrolls increasing by 500,000 jobs with estimates ranging from as high as 700,000 jobs to as low as 250,000. The unemployment rate of 4.8% was down four-tenths of percentage point, while average hourly earnings increased 0.6%.
“U.S. Senate leaders agreed to raise the Treasury Department’s borrowing authority until early December, averting a potential debt default later this month, Senate Majority Leader Chuck Schumer announced on Thursday. Democrats had been trying to pass legislation that would have raised the debt limit through the end of 2022 but Republicans blocked that effort.” (Reuters)
“The number of Americans filing new claims for jobless benefits dropped by the most in three months last week, suggesting the labor market recovery was regaining momentum after a recent slowdown, as the wave of COVID-19 infections began to subside.
The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed the number of people on state unemployment rolls plunging to an 18-month low in late September. That bodes well for the government’s closely watched employment report for September due for release on Friday.
Initial claims for state unemployment benefits decreased 38,000 to a seasonally adjusted 326,000 for the week ended Oct. 2. That was the biggest drop since late June. Unadjusted claims, which economists say offer a better read of the labor market, tumbled 41,431 to 258,909 last week. California led the drop in claims last week. There were also decreases in Michigan, Ohio, Washington DC and Missouri.” (Reuters)
“New orders for U.S.-made goods accelerated in August, pointing to sustained strength in manufacturing even as economic growth appeared to have slowed in the third quarter because of shortages of raw materials and labor.
The Commerce Department said on Monday that factory orders increased 1.2% in August. Data for July was revised higher to show orders rising 0.7% instead of gaining 0.4% as previously reported. Orders have now increased for four straight months.” (Reuters)


(MarketWatch)

Week Ahead Highlights: Inflation data is due out next week – the CPI and PPI reports come out on Tuesday and Wednesday.
“U.S. stock market investors are gauging whether more volatility is ahead because of surging global energy prices, which could drive up inflation, erode profit margins and pressure consumer spending.”

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Energy rolled on, leading by a wide margin again this week, with Communications Services falling the most.

Futures: WTI Crude rose 2.38%, ending at $79.58, a 7-year high, its highest close since 2014. Natural Gas futures also hit 7-year highs this week.

Stock Market News: 10-2-21

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Market Indexes: It was a down week, with the Tech-heavy NASDAQ pulling back the most. Friday saw a rebound – a welcome change after the September pullback.
“Wall Street stocks ended sharply lower on Tuesday in a broad sell-off driven by rising U.S. Treasury yields, deepening concerns over persistent inflation, and contentious debt ceiling negotiations in Washington. All three major U.S. stock indexes slid nearly 2% or more, with interest rate sensitive tech and tech-adjacent stocks weighing heaviest as investors lost their risk appetite. It was the S&P 500 index’s biggest one-day percentage drop since May, and the Nasdaq’s largest since March.” (Reuters)

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Volatility: The VIX rose 19% this week, ending the week at $21.15, after rising 40% in September.

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Market Breadth: 8 out of 30 DOW stocks rose this week, vs. 14 last week. 30% of the S&P 500 rose, vs. 56% last week.

FOREX: The US $ rose vs. other major currencies this week, except the Loonie and Aussie $.

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Economic News: “New orders and shipments of key U.S.-made capital goods increased solidly in August amid strong demand for computers and electronic products, keeping business spending on equipment on track for another quarter of robust growth. Core capital goods orders rose 0.5%; Core capital goods shipments rose 0.7%; and Durable goods orders surged 1.8%; unfilled orders up 1.0%.” (Reuters)

“The number of Americans filing new claims for jobless benefits rose further last week amid another increase in California, but the labor market recovery remains intact, with unemployment rolls steadily shrinking in mid-September. Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 362,000 for the week ended Sept. 25. Economists polled by Reuters had forecast 335,000 applications for the latest week. Claims have been rising, with economists blaming a range of factors including wildfires in California and the lingering effects of Hurricane Ida, which struck the Gulf Coast in late August and caused record flooding in New York and New Jersey in early September.
The latest wave of coronavirus infections could also have caused some companies in the high contact services sectors to layoff workers. The upheaval caused by the pandemic has also made it harder to adjust the data for seasonal fluctuations.
Unadjusted claims, which economists say offer a better read of the labor market, fell 8,326 to 298,255 last week.” (Reuters)


(MarketWatch)

Week Ahead Highlights: “Stocks and bonds could take cues in the coming week from developments in Washington, where lawmakers continue to debate an infrastructure spending package, as well as next Friday’s monthly U.S. jobs report.
Among the indicators investors are using to gauge stocks’ future trajectory is the spread between the yields on two-year and 10-year Treasuries. Some view this as a barometer of whether the economy is slowing or overheating.” (Reuters)

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Energy led by a wide margin again this week, with Healthcare falling the most.

Futures: WTI Crude rose 2.38%, ending at $75.74, its highest close since July.

Stock Market News: 9-25-21

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Market Indexes: It was a volatile week, with big swings, but all 4 indexes eked out small gains.
“Stocks slid Monday, with major indices tumbling by over 2% during the worst points of the afternoon session, as investors nervously eyed the potential ripple effects of the default of a major Chinese real estate company, as well as ongoing debates over the debt limit in Washington. The CBOE Volatility Index, or VIX, jumped by more than 30% to its highest since May, as a confluence of risks roiled markets.
Fears mounted that Evergrande, the Chinese real estate juggernaut would collapse under a major debt burden, impacting shareholders, bondholders and potentially triggering turmoil elsewhere across global markets. Meanwhile, heated debates in Washington over increasing the government’s borrowing limit built on the risk-off tone in markets.” (YahooFinance)
“World stock markets rallied on Thursday and the U.S. dollar retreated from one-month highs as worries faded about contagion from China Evergrande and as investors digested the Federal Reserve’s plans for reining in U.S. stimulus. Norway’s central bank raised its benchmark interest rate and said it expects to hike again in December, joining a growing list of nations moving away from emergency-level borrowing costs. Norway’s crown strengthened versus the euro to its highest since mid-June.” (Reuters)

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Volatility: The VIX was down 14.7% this week, ending the week at $17.75.

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Market Breadth: 14 out of 30 DOW stocks rose this week, vs. 9 last week. 56% of the S&P 500 rose, vs. 41% last week.

FOREX: The US $ fell vs. the Loonie and the Swiss Franc, and rose vs. other major currencies this week.

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Economic News: “The Federal Reserve said it could soon slow its large-scale purchases of government-backed debt and indicated it might raise interest rates in 2022. Federal Reserve officials indicated on Wednesday that they expect to soon slow the asset purchases they have been using to support the economy and predicted they may raise interest rates next year, sending a clear signal that policymakers are preparing to pivot away from full-blast monetary help as the business environment snaps back from the pandemic shock.
“If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the policy-setting Federal Open Market Committee said in its statement. The new phrasing eliminated wording that had promised to assess progress over “coming meetings,” suggesting that a formal announcement of the slowdown could come as early as the central bank’s next gathering in November.
Fed officials confront a complicated backdrop nearly 20 months after the coronavirus pandemic first shook the American economy. Business has rebounded as consumers spend strongly, helped along by repeated government stimulus checks and other benefits. But the virus persists and many adults remain unvaccinated, preventing a full return to normal.
The Fed has been holding interest rates at rock bottom since March 2020 and is buying $120 billion in government-backed bonds each month, policies that work together to keep many types of borrowing cheap. That has fueled lending and spending and boosted economic growth.
“My own view would be that the substantial further progress test for employment is all but met,” Mr. Powell said. “I think if the economy continues to progress broadly in line with expectations, and also the overall situation is appropriate for this, I think we could easily move ahead at the next meeting — or not, depending on whether we think those tests are met.”
Policymakers also discussed the pace of the slowdown in asset purchases, Mr. Powell said, with officials largely expecting the overall bond-buying program to conclude around the middle of next year.” (NY Times)

(MarketWatch)

Week Ahead Highlights: It’ll be a heavy data week, with several Housing reports, the Q2 GDP figure, and mfg. and goods reports due out.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: Energy and Financials led by a wide margin this week, with Real Estate falling the most again.

Futures: WTI Crude rose 7%, ending at $73.95, its highest point since July.
“U.S. crude inventories last week fell by 3.5M barrels to 414M barrels, the lowest since October 2018, the EIA reported Wed. The report was bullish overall, as crude supplies are “only going to get worse in the coming weeks” because inventories are “stretched and refiners are coming on back faster than supply of crude oil in the Gulf of Mexico. (YahooFinance)

Stock Market News: 9-11-21

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Market Indexes: All 4 indexes fell again this week, with the Russell small caps falling the most, down -2.78%.
“U.S. stocks fell for a fifth straight day on Friday, with the S&P 500 ending the week down 1.7 percent in its longest losing streak since February.” (NY Times)

“Wall Street main indexes finished lower on Friday after data showing persistent U.S. inflation offset expectations of an easing in U.S.-China tensions after a call between President Joe Biden and China’s Xi Jinping. U.S. producer prices increased solidly in August, indicating that high inflation is likely to persist for a while, with supply chains remaining tight as the COVID-19 pandemic drags on.” (Reuters)

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Volatility: The VIX rose 28% this week, ending the week at $20.95.

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Market Breadth: 5 out of 30 DOW stocks rose this week, vs. 17 last week. 16% of the S&P 500 rose, vs. 53% last week.

FOREX: The US $ rose vs. other major currencies this week.

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Economic News: Unemployment claims fell to 310K last week from 340K the previous week.The Producer Price Index fell to 0.7% in August from 1% in July.


(MarketWatch)

Week Ahead Highlights: Investors will get additional readings on the health of the U.S. economy next week with the release of consumer price index figures, retail sales, and a measure of consumer sentiment.

Next Week’s US Economic Reports:

(MarketWatch)

Sectors: All sectors fell this week, with Consumer Discretionary holding up the best, and Real Estate falling the most.

Futures: WTI Crude rose .61%, ending at $69.17.