 | AUTHOR: Jason Roque, CFP®, APMA®, AWMA® TITLE: Investment Adviser Rep – CCO TAGS: S&P 500, NASDAQ, Rates, Gov’t Shutdown |
Markets fell… again… Shocking I know, but a new quarter could bring a new market sentiment!
Monday S&P 500 0.40% | NASDAQ 0.45%
Markets marched higher for the day. It did not come easy, however, as pressure on interest rates continued. The Federal Reserve Bank’s (FRB) promise to keep rates high for long is sending a shock wave through bond markets. Higher rates mean tougher times for Growth stocks, which tend to carry more debt.
Tuesday S&P 500 1.47% | NASDAQ 1.57%
Consumer Confidence and New Home sales led the charge lower for markets. To be clear, neither fell that much. Consumer Confidence fell from 108.7 to 103, a level that is fairly normal post pandemic. New Home Sales fell from 739K to 675K, a 8.7% slip. Still a much higher level than a year ago at 532K. Jamie Dimon, CEO of Chase, discussed interest rates having to climb into the 7’s for the FRB to contain inflation. That likely sent a scare through markets.
Wednesday S&P 500 0.02% | NASDAQ 0.22%
Markets were little changed on the day. It could have been a break from the pain felt yesterday; it also could have been a shift of attention. For the last week, everything has centered around interest rates. As the end of September gets closer, the focus seems to be shifting to the risk of a government shutdown.
Thursday S&P 500 0.59% | NASDAQ 0.83%
The sharper rise in the NASDAQ over the S&P 500 was the result of softer market rates. After marching higher for the last week, rates showed the first relaxing of rates since the FRB announcement last week. As a reminder, they announced that they were doing nothing…
Friday S&P 500 0.27% | NASDAQ 0.14%
Core PCE (the FRB’s preferred measure of inflation) fell below 4% for the first time since October 2021. While still elevated and well above the 2% target, it fell 0.4% marking a strong move in the right direction. This is good news and should have yielded an up market… it did not. The lack of progress from congress on putting together a budget to avert a shutdown garnered too much attention. It caused a sell environment as investors did not want to be long into the weekend drama.
Conclusion S&P 500 0.74% | NASDAQ 0.06%
For as much turmoil as there was throughout the week, the S&P 500 fell less than 1%. The decline of September, unfortunately not an uncommon thing, may be coming to a close. The fourth quarter should bring renewed buying as people prepare for corporate earnings and positioning for a consumer heavy quarter.
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