EQUITIES MIXED AS INFLATION INCHES UP AND RISING TREASURY YIELDS DAMPEN THE TECH AND SMALLER-CAP NAMES
Weekly Market Update — August 12, 2023
|Weekly Market Performance
*Source: Bonds represented by the Bloomberg Barclays US Aggregate Bond TR USD. This chart is for illustrative purposes only and does not represent the performance of any specific security. Past performance cannot guarantee future results.
Stocks & Equities Mixed as Inflation Ticks Up
It was a mixed week for the major U.S. equity indices, as the DJIA squeaked out a modest gain and NASDAQ and the Russell 2000 lost close to 2% as inflation and U.S. Treasuries both rose. The good news was that trading volume was very light, as is typical for August.
Value stocks significantly outperformed Growth stocks and the interest-sensitive indices – namely NASDAQ and the Russell 2000 – struggled as the 10-year Treasury settled-in well north of 4%.
The Healthcare sector made a big jump on the week, but Information Tech really struggled, mostly on the belief that rising rates will really impact future profits. In addition, Financials struggled early in the week after Moody’s lowered its credit ratings for 10 smaller banks and placed six other banks on downgrade watch.
The big news of the week was the release of a couple of key inflation data sets, including the Consumer Price Index for the month of July, which showed headline CPI at 3.2% year-over-year. Further, core inflation, excluding food and energy, came in at 4.7%. But the Producer Price Index came in a little hotter than expected, possibly causing investors to take money off the table and worry that the Fed might indeed raise rates yet again this year.
While we are only 11 days into August, equities have been retreating mostly, with the S&P 500 down about 3% since its recent high on July 31st and NASDAQ down about 4% since then.
Inflation Inches Up
On Thursday, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers rose 0.2% in July on a seasonally adjusted basis, the same increase as in June. In addition, over the last 12 months, the all items index increased 3.2% before seasonal adjustment.
On a yearly basis:
Producer Price Index Up Too
On Friday, the U.S. Bureau of Labor Statistics then reported that the Producer Price Index for final demand increased 0.3% in July, seasonally adjusted. Final demand prices were unchanged in June and declined 0.3% in May. On an unadjusted basis, the index for final demand advanced 0.8% for the 12 months ended in July.
Small Businesses Feeling Slightly More Optimistic Since Last Month
On Tuesday, the NFIB’s Small Business Optimism Index increased 1.6 points in June to 91.0, however, it is the 18th consecutive month below the 49-year average of 98.
Additional findings included that:
Small Businesses Struggling to Hire
As reported in the NFIB’s monthly jobs report, 59% of owners reported hiring or trying to hire in June, down four points from May. Of those hiring or trying to hire, 92% reported few or no qualified applicants for the positions they were trying to fill.
Small Businesses Spending Less Money
In addition, 53% of owners reported capital outlays in the last six months, down four points from May. Of those making expenditures:
✅ BOOK AN APPOINTMENT TODAY: https://calendly.com/tdwealth
🔴 SEE ALL OUR LATEST BLOG POSTS: https://tdwealth.net/articles
If you like the content, smash that like button! It tells YouTube you were here, and the Youtube algorithm will show the video to others who may be interested in content like this. So, please hit that LIKE button!💥
🎯🎯🎯Don’t forget to SUBSCRIBE here: https://www.youtube.com/channel/UChmBYECKIzlEBFDDDBu-UIg
✅ Contact me: TDavies@TDWealth.Net
🔥🔥🔥 ====== ===Get Our FREE GUIDES ========== 🔥🔥🔥
🎯Retirement Income: The Transition into Retirement: https://davieswealth.tdwealth.net/retirement-income-transition-into-retirement
🎯Beginner’s Guide to Investing Basics: https://davieswealth.tdwealth.net/investing-basics
✅ LET’S GET SOCIAL
Youtube Channel: https://www.youtube.com/c/TdwealthNetWealthManagement
Lat and Long
Davies Wealth Management
684 SE Monterey Road
Stuart, FL 34994
**Davies Wealth Management makes content available as a service to its clients and other visitors, to be used for informational purposes only. Davies Wealth Management provides accurate and timely information, however you should always consult with a retirement, tax, or legal professionals prior to taking any action.