The government shutdown dragged on for another week without any hope of a resolution. This means that a slew of economic reports typically issued throughout the month have either been postponed or scrapped altogether. The September jobs report looks like it won’t be released until the first week of November at the earliest, and if the shutdown drags on much longer, the October report may be in danger of being delayed as well.
However, one important report was finally released this week in the form of the September inflation figures. Over the past month, inflation rose 0.3 percent, which was slightly below the expected increase of 0.4 percent. However, on an annualized basis, inflation was 3 percent, which was slightly higher than the 2.9 percent recorded in August.
Also on Friday, the Flash Services PMI and the Flash Manufacturing PMI reports were made public. The Flash Services PMI came in at 55.2, which was much higher than the projected 53.5 and higher than last month’s official figure of 54.2. The Flash Manufacturing PMI came in at 52.2, which was slightly higher than projections and last month’s figure. This implies that there is a period of growth ahead for both the services and manufacturing sector.
The state of the economy may also be complicated by the ongoing wage trade wars with China and Canada. Although it’s unlikely that a 100 percent tariff against China will be enforced in full, tensions between the two nations mean that anything is possible over the short-term.
The S&P 500 was up 90 points to finish 6,791, which represented an increase of 1.34 percent over the past five trading days. The index continues to make all-time highs as the April correction becomes a distant memory. The weekly low of 6,668 was reached on Wednesday morning while the weekly high of 6,806 was hit late on Friday afternoon.
The Dow was up 778 points to finish the week at 47,207, which was a gain of 1.68 percent over the past five trading days. On Monday, the market opened at its lowest point of the week of 46,967 before reversing and moving higher. The high came on Friday when the index reached 47,299.
Finally, the Nasdaq finished the week up 326 points to close at 25,358 at the end of trading Friday. This was a gain of 1.31 percent for the tech-heavy sector that is also flirting with all-time highs. For the week, the index peaked at 25,401 late on Friday and made its low of the week on Wednesday when it dipped to 24,711.
In international news, Great Britain announced on Wednesday morning that its CPI was 3.8 percent on an annualized basis. This was lower than the projected 4 percent and the same as last month’s official figure. On Tuesday morning, Canada announced that its CPI rose by 0.1 percent on a monthly basis and was 3.2 percent on an annualized basis. On Thursday, Canada announced that retail sales were up 1 percent over the past month.
The upcoming week will likely be a muted one as only the Fed Funds decision on Wednesday is guaranteed to take place. It’s expected that the Fed will cut interest rates by 25 basis points at the October meeting.