EQUITIES RETREAT AS OIL JUMPS FOR THE SECOND WEEK IN A ROW AND MORTGAGE-DEMAND HITS A 28-YEAR LOW
Weekly Equities Market Update — September 9, 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 Retreat As Treasury Yields Rise
Equities retreated over the holiday-shortened week as generally positive economic data sets drove an increase in rates. But despite yields advancing, on the week Growth stocks outperformed Value, the Large-Caps outperformed the Small-Caps and the Mega-Caps outperformed the Large-Caps.
And while one stock does not dictate markets, interestingly it did feel like Apple, which is the most heavily weighted stock in the S&P 500 Index, did impact the overall market. Apple tumbled about 6% on the week after reports that China would no longer allow its government employees to use iPhones. Wall Street was trying to unpack this development as Apple seems to have a good relationship with the Chinese government and Wall Street was trying to figure out the implications for companies that don’t have such a relationship with the Chinese government.
The week’s economic calendar was all over the board, with most maybe surprising on the upside. The big negative was the Institute for Supply Management’s report on August services sector activity, which advanced to its highest level since February. And buried deeper in the report were that new orders were growing at a faster pace and inventories had risen significantly. Both of these developments support the case that the Fed is not done raising short-term rates.
In addition to the ISM’s Report and jobless claims, there was a lot more economic data to digest this week, including that:
Mortgage Demand Hits Lowest Level in 28 Years
On Wednesday it was announced that mortgage applications decreased 2.9% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending September 1, 2023.
“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates. Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates.”
A Harbinger of Things to Come?
Goods and Services Deficit Rises
On Wednesday, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $65.0 billion in July, up $1.3 billion from $63.7 billion in June.
Exports, Imports, and Balance
Goods by Selected Countries and Areas:
The July figures show surpluses, in billions of dollars, with Netherlands ($4.5), South and Central America ($4.1), Hong Kong ($1.5), Belgium ($1.5), Australia ($1.5), United Kingdom ($0.5), Brazil ($0.3), and Singapore ($0.2). Deficits were recorded, in billions of dollars, with China ($24.0), European Union ($17.3), Mexico ($12.8), Vietnam ($9.3), Germany ($7.2), Ireland ($6.5), Japan ($5.9), South Korea ($5.3), Italy ($4.1), Canada ($4.0), Taiwan ($3.9), India ($3.0), Malaysia ($2.4), Switzerland ($1.9), Israel ($0.8), France ($0.4), and Saudi Arabia ($0.2).
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