All data is for the week ended September 30, 2023
Stocks
Stocks were mixed in the US last week as investors anticipated important economic data for the month, with the S&P 500 declining 0.71%, the Russell 2000 advancing 0.55% and the Nasdaq adding 0.07%. Overseas, the developed markets index (MSCI EAFE) dropped 1.40% while the emerging markets (MSCI EEM) declined 1.13%. In the US the best performing sectors were energy and materials while utilities and staples were the laggards. By style, small caps were the best performers and growth stocks outperformed value stocks.
Fixed Income
Interest rates rose and bond values declined, with the benchmark 10-year US treasury ending the week at 4.59%, having reached its highest since 2007 on Wednesday.2 The differential or spread between 2-year and 10-year government bonds has shrunk from a low of -1.07% in early March to -0.44% at month end.3
Commodities
Oil prices climbed to their highest in over a year on Wednesday, reaching $94.75 per barrel for West Texas crude, due to ongoing supply curtailments from Russia and Saudi Arabia. Prices settled back to close the week at $90.79 for a weekly gain of 0.84%.4
Economic Data
Consumer sentiment dropped to 68.1, at the high end of the consensus range of estimates and down 1.4 points from the August report. The report reflected consumers’ concerns about a possible government shutdown and the impact from the auto workers strike.5
Inflation as measured by the personal consumption expenditures index (PCE) was 0.4% on a month-over-month basis in August, on the low end of consensus expectations. However, it edged up from 0.2% in July. After excluding volatile food and energy, the core PCE rose just 0.1% month-over-month, which was below expectations of 0.2%.6
Company News7
Advanced Micro Devices Inc. (AMD) and Nvidia (NVDA), both Core Select and G33 holdings, rose 6.88% and 4.54%, respectively, last week as most semiconductor stocks moved higher after intense selling over the past several sessions. This rebound occurred despite cautious guidance from industry stalwart Micron Technologies (MU)8 since investors believe their issues are contained to that one firm.
NextEra Energy (NEE), a Core Select and G50 holding, declined 15.38% last week. The NextEra Partners Limited Partnership (NEP) announced that its earnings growth outlook is greatly reduced due to rising cost of capital.9 Our holding in NEE is under review.
Did you know…
In the fall, beta-carotene gives leaves their orange hue by reflecting yellow and red light from the sun.
Mariann Montagne, CFA
Portfolio Management Consultant
Sources:
1 JP Morgan Weekly Market Recap 10-2-23
3 YCharts 10-2 Treasury Yield Spreads
5 University of Michigan Consumer Sentiment 9-29-23
6 Bureau of Economic Analysis 9-29-23
7 All weekly changes in company stock prices: Yahoo Finance
8 Bloomberg: Chipmaker Micron Predicts Steep Loss in Current Quarter 9-28-23