Weekly Market Update — September 16, 2023

  • It was a mixed week on Wall Street, as the DJIA scratched out a meager 0.1% gain and NASDAQ (-0.4%), the S&P 500 (-0.2%) and the Russell 2000 (-0.2%) retreated, with most of the losses happening on the last day of the week
  • In fact, all 4 major equity indices were on track for a positive week until Friday, when the S&P 500 and NASDAQ lost more than 1% on chip-maker worries and the United Auto Workers strike that commenced at midnight on Thursday
  • The UAW’s strike at three manufacturing plants had an inverse impact on the stock of the Big Three, as Ford, Stellantis, and General Motors recorded weekly gains of 2.5%, 5.6%, and 3.0%, respectively
  • Of the 11 S&P 500 sectors, 8 of them were positive, as the Information Technology was the worst performer, losing 2.2%
  • Apple continued to struggle this week, but one of the big stock-stories of the week was that Netflix lost more than 10% after it reported weak ad revenues
  • Wall Street was bombarded with a ton of economic data, with the ones garnering a lot of press being the rise in the Consumer Price Index, Core-CPI, and the Producer Price Index
  • The 2-year Treasury yield rose to end the week at 5.04% whereas the 10-year Treasury rose 7 basis points to 4.33%
  • WTI crude oil jumped 4.2% to $91.00/barrel, the third consecutive week of big gains
Weekly Market Performance

Close Week YTD
DJIA 34,618 +0.1% +4.4%
S&P 500 4,450 -0.2% +15.9%
NASDAQ 13,708 -0.4% +31.0%
Russell 2000 1,847 -0.2% +4.9%
MSCI EAFE 2,108 +1.7% +8.4%
*Bond Index 2,059 +0.06% +0.50%
10–Year Treasury Yield 4.33% +0.07% +0.4%

*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.

Stock Equities Mixed as Inflation is Also Mixed

Despite getting off to a great start, Friday’s retreat pushed most of the major indices into the red for the week, with only the mega-cap DJIA scratching out a tiny 0.2% gain.

The other indices lost less than 1%, as hopes for a soft-landing increased ahead of the Fed’s major rate decision scheduled for next week. Rising oil prices pushed value stocks out ahead of growth stocks, as the benchmark West Texas Intermediate oil prices rose above $90/barrel for the first time since November 2022. Maybe worse than that is the fact that WTI oil has risen over 30% since July 1st.

On Wednesday, the eagerly anticipated August CPI data was released and the data was, at best, mixed. On the one hand, the data showed that the Fed is making progress bringing certain elements of inflation down – but on the other hand, rising oil and energy prices might push the Fed to raise rates yet again next week.

Then the very next day, the release of the August Producer Price Index showed that that headline producer prices advanced more than expected, causing more Fed-raising worries.


There was a lot of economic data this week, including that:

  • Total CPI was up;
  • Core CPI was up;
  • Retail Sales were up;
  • Industrial Production was up;
  • The Producer Price Index was up;
  • Jobless Claims were up;
  • Continuing jobless claims were up.
  • The U.S. Treasury reported a surplus;
  • Consumer sentiment dropped; and
  • Small Business optimism dropped.

Consumer Price Index Rises

Total CPI increased 0.6% month-over-month in August, with rising gasoline prices accounting for over half of the increase. Core CPI, which excludes food and energy, rose a stronger-than-expected 0.3% month-over-month. On a year-over-year basis, total CPI was up 3.7%, versus 3.2% in July, and core CPI was up 4.3%, versus 4.7% in July.


In addition:

  • The food index was up 0.2% month-over-month and up 4.3% year-over-year.
  • The energy index was up 5.6% month-over-month and down 3.6% year-over-year.
  • The shelter index was up 0.3% month-over-month and up 7.3% year-over-year, accounting for over 70% of the total increase in core CPI over the past 12 months.
  • The used cars and trucks index was down 1.2% month-over-month and down 6.6% year-over-year.
  • Services inflation less rent of shelter was up 3.1% year-over-year on an unadjusted basis.


Retail Sales Up

August retail sales increased 0.6% month-over-month following a downwardly revised 0.5% increase (from 0.7%) in July. Excluding autos, retail sales rose 0.6% month-over-month following a downwardly revised 0.7% increase (from 1.0%) in July.

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In addition:

  • Motor vehicle and parts dealers sales increased 0.3% month-over-month.
  • Furniture and home furnishing stores sales declined 1.0% month-over-month.
  • Electronic and appliance store sales jumped 0.7% month-over-month.
  • Building material and garden equipment and supplies dealer sales rose 0.1% month-over-month
  • Clothing and clothing accessories store sales increased 0.9%month-over-month.
  • General merchandise store sales were up 0.3% month-over-month.
  • Nonstore retailer sales were flat month-over-month.
  • Food services and drinking places sales increased 0.3% month-over-month

Industrial Production Up

Total industrial production increased 0.4% month-over-month in August following a downwardly revised 0.7% increase (from 1.0%) in July. The capacity utilization rate jumped to 79.7% from an upwardly revised 79.5% (from 79.3%) in July. And Total industrial production was up 0.2% year-over-year. The capacity utilization rate of 79.7% was in-line with its long-run average.

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In addition, it was reported that:

  • Manufacturing output increased 0.1% following a downwardly revised 0.4% increase (from 0.5%) in July. Motor vehicle assemblies declined 8.8% to a seasonally adjusted annual rate of 10.74 million units from 11.77 million in July. Manufacturing capacity utilization held steady at 77.9%.
  • Mining production increased 1.4% following a 0.2% decline in July. Mining capacity utilization rose to 94.3% from 92.9% in July.
  • The output of utilities increased 0.9% following a 4.4% increase in July. Utilities capacity utilization jumped to 73.0% from 72.6%.

Producer Price Index Increases

The August Producer Price Index for final demand increased 0.7% month-over-month following a 0.3% increase in July. The index for final demand, excluding food and energy, increased 0.2% month-over-month. On a year-over-year basis, the index for final demand was up 1.6% and the index for final demand, excluding food and energy, was up 2.2%.

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  • The index for final demand services increased 0.2% in August.
  • The 2.0% increase in prices for final demand goods was the biggest increase since June 2022.
  • Prices for processed goods for intermediate demand jumped 2.1% in August, which was the biggest jump since May 2022.
  • The index for unprocessed goods for intermediate demand rose 1.3% in August, paced by a 5.4% increase in prices for unprocessed energy materials.

Treasury Surplus

The August Treasury Budget showed a surplus of $89.2 billion compared to a deficit of $219.6 billion in the same period a year ago. The surplus in August resulted from receipts ($283.1 billion) exceeding outlays ($193.9 billion).


The Treasury Department also reported that:

  • Receipts from Individual Income Taxes were $130 billion. Social Insurance & Retirement receipts totaled $121 billion.
  • The largest outlay by function was Social Security ($116 billion) followed by Medicare ($73 billion), Health ($71 billion), National Defense ($70 billion), and Net Interest ($69 billion).
  • The fiscal year-to-date deficit is $1.52 trillion versus $1.61 trillion in July.
  • The budget deficit for the last 12 months is $1.95 trillion versus $2.26 trillion in July.

Consumer Sentiment Drops

On Friday, the University of Michigan reported that “consumer sentiment inched down a scant 1.8 index points this month and has been essentially flat for the past two months. At 67.7 points, sentiment is currently about 35% above the all-time historic low reached in June of 2022 but remains shy of the historical average reading of 86. Sentiment this month was characterized by divergent movements across index components and across demographic groups with little net change from last month. Notably, though, both short-run and long-run expectations for economic conditions improved modestly this month, though on net consumers remain relatively tentative about the trajectory of the economy. So far, few consumers mentioned the potential federal government shutdown, but if the shutdown comes to bear, consumer views on the economy will likely slide, as was the case just a few months ago when the debt ceiling neared a breach.

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Throughout the survey, consumers have taken note of the stalling slowdown in inflation, but they do expect the slowdown to resume. Year-ahead inflation expectations moderated from 3.5% last month to 3.1% this month. The current reading is the lowest since March 2021 and is just above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations came in at 2.7%, falling below the narrow 2.9-3.1% range for only the second time in the last 26 months. In comparison, long-run inflation expectations ranged between 2.2 and 2.6% in the two years pre-pandemic.”

Optimism Among Small Business Owners Declined in August

The National Federation of Independent Business reported on September 12th that the “NFIB’s Small Business Optimism Index decreased 0.6 of a point in August to 91.3, the 20th consecutive month below the 49-year average of 98. Twenty-three percent of small business owners reported that inflation was their single most important business problem, up two points from last month. The net percent of owners raising average selling prices increased two points to a net 27% (seasonally adjusted), still at an inflationary level.”



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