Key Developments
- The S&P 500 printed a mere 0.5% return this week, the same as the week prior. Energy stocks led the sectors with a 4.5% return on the back of geopolitical worries in the Middle East.
- 10-year Treasury yields pulled back to close the week at a level of 4.6% after climbing for five weeks straight. Safe-haven appeal and dovish commentary from Fed officials played a role.
- On the inflation front, year-over-year PPI inflation came in above expectations (2.2% versus 1.6%). Year-over-Year CPI inflation came in slightly above consensus (3.7% versus 3.6%).
- J.P. Morgan, Citigroup and Wells Fargo reported earnings on Friday, reporting significant jumps in profits, helped by rising interest rates. However, the banks warned that big risks lie ahead.
- The state of the consumer will be in the spotlight on Tuesday, when retail sales numbers come out. Housing activity data will also be in focus.
- Notable earnings releases include Bank of America on Tuesday, and Tesla and Netflix on Wednesday.
This Week’s Economic Data
Chart of the Week
Homebuyer Affordability Plunges in August
- The National Association of Realtors’ Homebuyer Affordability Index plunged in August to the lowest level in data going back to 1989, as reported on Friday.
- The Fed’s aggressive monetary policy is negatively impacting the housing market. A weakening housing market could spell trouble for jumpstarting the durable goods spending cycle.
Global Cross-Asset Performance Summary
Weekly
Year to Date
S&P 500 Sector Performance
Weekly
Year to Date
US Equity Market Style and Size Performance
Does the Geopolitical crisis change your view of TUR. Or is this just a pause until we know if this spreads out of the immediate region?
Peter, These are all important warning signs, unfortunately “algo’s don’t care’.
It’s not only the algorithms; they don’t seem to care about global economics at the moment. It’s also the global liquidity and the Federal Reserve (FED) that is printing money in the background, which makes it very hard for the S&P500 to fall. Something may be broken or already broken in the background, and we don’t know yet. The FED is not disclosing this information, which is why they are printing money to support it (just my amateur opinion).