Weekly Update

The Weekly Update

Week of October 30th, 2023
By Christopher T. Much, CFP®, AIF®

Amid a busy week of corporate earnings reports, stocks slumped on cautious earnings guidance, fears of higher interest rates, and growing anxiety over the increasing amount of Treasury bonds and notes coming to market.

The Dow Jones Industrial Average dropped 1.88%, while the Standard & Poor’s 500 declined 3.29%. But the Nasdaq Composite index gave up 4.48% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, retreated 1.82%.

October Slide Continues
Stocks continued their slide last week despite mostly better-than-expected earnings results. While earnings surprises were generally positive, investors were troubled by declines in year-over-year net profit margins and tepid earnings guidance. Particularly hard hit were technology companies, following mixed earnings results.

Economic data released on Thursday showed remarkable economic strength, with above-consensus forecast growth in third-quarter Gross Domestic Product (GDP) and September’s durable goods …

The Weekly Update

Week of October 23rd, 2023
By Christopher T. Much, CFP®, AIF®

Rising bond yields and uncertainty over whether this was the close of the Fed’s rate-hike cycle dragged markets lower last week despite solid corporate earnings results.

The Dow Jones Industrial Average sank 1.61%, while the Standard & Poor’s 500 fell 2.39%. The Nasdaq Composite index, which has led for much of the year, slumped 3.16%. The MSCI EAFE index, which tracks developed overseas stock markets, retreated 1.67%.

Rising Yields Sink Stocks
Stocks rallied to start the week on earnings optimism before losing momentum over rising bond yields. Yields rose after traders speculated that strong economic data might persuade the Fed to raise rates. By mid-week, stocks turned lower as the 10-year Treasury yield moved above 4.9% for the first time since 2007, while mortgage rates hit 8%–the highest level since mid-2000.

Stocks were under pressure Thursday as the 10-year Treasury yield …

The Weekly Update

Week of October 16th, 2023
By Christopher T. Much, CFP®, AIF®

Stocks ended mixed last week amid the outbreak of hostilities in the Middle East and higher-than-expected inflation data.

The Dow Jones Industrial Average gained 0.20%, while the Standard & Poor’s 500 rose 0.45%. But the Nasdaq Composite index slipped 0.18% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.37%.

Inflation Hurts Sentiment
Stocks exhibited remarkable resilience in the face of a surprise attack on Israel and hotter inflation data than investors expected. Stock prices initially buckled on the breakout of hostilities in the Middle East. Still, they rallied in afternoon trading as investors gained optimism that the war may not spread to other countries. Oil and defense stocks rose sharply, while airlines fell.

Stocks continued to advance into Wednesday as falling bond yields and a retreat in oil prices overcame the disappointment of …

The Weekly Update

Week of October 9th, 2023
By Christopher T. Much, CFP®, AIF®

A Friday rally overcame a shaky week, sending stocks mostly higher.

The Dow Jones Industrial Average slipped 0.30% for the week. Meanwhile, the Standard & Poor’s 500 gained 0.48%, and the Nasdaq Composite index added 1.60% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, fell 2.37%.

Friday Rally
Stocks rallied on Friday after a stronger employment report than Wall Street expected. The headline indicating an increase in September payrolls initially generated fears of further Fed rate hikes, leading to a spike in bond yields and steep early morning losses. A yield retreat may have triggered the turnaround as investors focused more on the month’s moderate wage growth.

Stocks were shaky for much of last week on rising bond yields. When Treasury yields hit their highest level since 2007 on Tuesday, stock prices dropped, leaving …

The Weekly Update

Week of October 2nd, 2023
By Christopher T. Much, CFP®, AIF®

Rising bond yields and government shutdown fears left stocks in mostly negative territory for the week.

The Dow Jones Industrial Average lost 1.34%, while the Standard & Poor’s 500 slipped 0.74%. The Nasdaq Composite index was flat (+0.06%) for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 1.95%.

Stocks Follow the Bond Market
The bond market drove stock prices for much of last week as investors fretted about rising bond yields. After beginning the week with small gains, stocks resumed their September decline amid weak housing data and a decline in consumer confidence. However, it was the jump in bond yields, which sent the 10-year Treasury yield to near a 15-year high, that may have most undermined investor sentiment.

After a failed attempt at a rebound mid-week, stocks staged a Thursday rally on a pause in …

The Weekly Update

Week of September 25th, 2023
By Christopher T. Much, CFP®, AIF®

Rising bond yields and fears of a government shutdown hammered stocks last week, with technology shares bearing the brunt of the retreat.

The Dow Jones Industrial Average lost 1.89%, while the Standard & Poor’s 500 dropped 2.93%. The Nasdaq Composite index tumbled 3.62% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 1.77%.

Stocks Sell Off
Investor sentiment took a decidedly negative turn last week when investors were caught off-guard by the Fed signaling another potential rate hike this year, upending hopes that the Fed might finish its current rate-hike cycle.

Stocks declined sharply following the Federal Open Market Committee (FOMC) announcement and continued to fall the following day as bond yields spiked. The 10-year Treasury yield hit 4.48% on Thursday, touching its highest point in more than 15 years.

Stocks also reacted to news that the …

The Weekly Update

Week of September 18th, 2023
By Christopher T. Much, CFP®, AIF®

Stocks ended the week roughly where they began as investors digested a mixed set of new economic data.

The Dow Jones Industrial Average gained 0.12%, while the Standard & Poor’s 500 slipped 0.16%. The Nasdaq Composite index fell 0.39% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 1.23%.

Stocks Struggle for Direction
Stocks traded around the flatline without any catalyst in either direction.

On Thursday, investors welcomed the European Central Bank, signaling its rate-hiking campaign may be nearing its conclusion and a successful IPO that revived optimism in the capital markets. Investors also cheered a stronger-than-forecast retail sales report and a modest increase in core producer prices, overlooking a higher-than-expected headline number.

But sentiment quickly reversed on Friday as a drop in consumer confidence, troubling news in the semiconductor space, and a labor strike at the …

The Weekly Update

Week of September 11th, 2023
By Christopher T. Much, CFP®, AIF®

Concerns that the Fed may raise interest rates soured investor sentiment, sending stocks lower in a holiday-shortened trading week.

The Dow Jones Industrial Average slipped 0.75%, while the Standard & Poor’s 500 declined 1.29%. The Nasdaq Composite index dropped 1.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.28%.

Stocks Resumed Their Decline
Stocks were bedeviled by rising bond yields and higher oil prices last week, with technology shares bearing the brunt of the decline. Hopes that the Fed may not find it necessary to raise interest rates were dented by economic data reflecting higher prices, rising labor costs, and fewer-than-forecast initial jobless claims.

The inflationary implications of higher oil prices also contributed to the growing sense that the Fed may implement additional rate hikes. While bond traders generally still expect no rate hike in …

The Weekly Update

Week of September 5th, 2023
By Christopher T. Much, CFP®, AIF®

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%.

Stocks Rise on Slowing Economy
Investor sentiment turned positive last week as signs of economic softness were interpreted as reasons 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 bounce back 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 …

The Weekly Update

Week of August 28th, 2023
By Christopher T. Much, CFP®, AIF®

Stocks fluctuated last week, jostled by fitful bond yields and headline news, before ending strongly following Fed Chair Powell’s comments on the monetary outlook.

The Dow Jones Industrial Average slipped 0.45%, while the Standard & Poor’s 500 gained 0.82%. The Nasdaq Composite index rose 2.26% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.78%.

Stocks Manage Gains
Stock rallied on Monday on upbeat sentiment over the earnings release from a mega-cap semiconductor company scheduled for mid-week, only to see that momentum fizzle the following day on weak retail earnings and a credit downgrade of a handful of banks.

Stocks resumed their rally on weak economic data, which fueled hopes for future Fed dovishness. They also rose on expectations that earnings from a leading AI chipmaker would validate the AI narrative that propelled markets in the …