Market Perspective for October 1, 2023

The markets were mixed this week as investors prepared for a government shutdown.  It took until Saturday to avert, but a short-term agreement will keep the government open through mid-November.

On Tuesday, the CB Consumer Confidence Index came in at 103, which was down 108.7 last month and lower than the projected 105.5. Tuesday morning also saw the release of the Richmond Manufacturing Index, which came in at five compared to negative seven last month. Analysts had expected the index to come in at negative six.

Finally on Tuesday, new home sales over the past month declined to 675,000 from 739,000 last month. However, it was also revealed that prices for single-family homes rose .1 percent over the month.

On Thursday, final quarter GDP figures for the second quarter of 2023 revealed that the economy grew by 2.1 percent over the months of April, May and June. This was the same as the first quarter of 2023 but was lower than the 2.2 percent growth analysts had expected to see. Unemployment benefit claim numbers were also released on Thursday, and over the past seven days, 204,000 people filed for benefits compared to 202,000 a week ago.

On Friday, the Chicago PMI report was released and came in at 44.1 percent, which was lower than 48.7 percent last month. Analysts had predicted that the report would come in at 47.5 percent. Also on Friday, the University of Michigan released its consumer sentiment and inflation expectation surveys. Consumer sentiment improved to 68.1 percent while respondents believed that inflation would be at 3.2 percent at this time next year.

The Dow 30 lost 393 points this week to finish at 33,507, which represented a decline of 1.16 percent over the last five trading days. On Monday, the index made a high of 33,980 before reversing and trending lower until Wednesday afternoon when it hit its weekly low of 33,345. On Thursday and Friday, the market stayed in a tight trading range meandering between 33,511 and 33,823.

Unlike the Dow, the Nasdaq finished up .09 percent for the week after closing at 13,219. On Wednesday, the Nasdaq made its weekly low at 12,981 before spending the rest of the week trending upward and hitting its weekly high of 13,357 on Friday morning.

Finally, the S&P 500 lost 29 points over the trading week to finish at 4,288. This was a drop of .66 percent over the past five trading days, and it followed a path like the Dow and Nasdaq to get there. On Monday, it hit its high for the week of 4,335 before nose diving and making a low of 4,242 on Wednesday.

A number of reports are scheduled to be released this week. On Monday, the ISM Manufacturing PMI report is set to be made public while the ISM Services PMI will be made public on Wednesday. Also on Wednesday, the ADP Nonfarm Employment Change numbers for the previous month are set to come out.

On Friday, average hourly earnings, the unemployment rate and the nonfarm payroll employment change figures from the Bureau of Labor Statistics (BLS) will all come out. Christopher Waller, who is a member of the FOMC, is also scheduled to speak Friday. Federal Reserve Chair Jerome Powell is scheduled to speak on Monday, which will likely provide guidance to the markets prior to Waller’s speech.

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