All data is for the week ended October 6, 2023
Stocks
Equities were mixed in the US last week, with the benchmark S&P 500 rising 0.52%, the Russell 2000 declining 2.19% and the Nasdaq adding 1.62% after the labor data provided more evidence that the labor market remains strong in the face of restrictive monetary policy. See Economic Data below. Overseas, the developed markets index (MSCI EAFE) dropped 1.85% while the emerging markets index (MSCI EEM) declined 1.61%. Within the US the best performing sectors were communication services and technology while energy and consumer staples were the laggards. By style growth outperformed value and large caps outperformed small caps. The attack on Israel, and subsequent retaliation on Palestine, over the weekend is expected to change investors focus in the coming days.
Fixed Income
Yields rose last week, setting 16-year highs across the 2-year, 10-year and 30-year maturities for government issues on Tuesday. At the week’s end the benchmark 10-year treasury yield stood at 4.78%, a gain of 19 basis points for the week.2
Commodities
The price of West Texas crude oil dropped 8.81% last week to $82.79 per barrel. This was the largest weekly price drop since March 3 and reflects the government report of a large buildup in gasoline inventory and weak gasoline demand.4 Additionally, concerns about economic growth in the US and Europe contributed to weaker oil prices.
Economic Data
Nonfarm payrolls rose 336,000 in September after a net upward revision of 119,000 to the prior two months. The September level more than doubled the consensus estimate of a 160,000 increase. Private payrolls were up 263,000 in September – led by leisure and hospitality – and government jobs contributed another 73,000. The unemployment rate remained at 3.8%. Wages were up 0.2% in September vs. August; the year-over-year rate was up 4.2%.5
The services index declined 0.9 points in September to 53.6. This indicates that the services sector continues to grow, albeit at a slower rate. The sector has grown in 39 of the past 40 months. Notably prices were flat. Meanwhile the manufacturing index rose 1.4 points to 49 in September vs. its August reading. Note any read below 50 indicates a contraction. Supply deliveries were notably faster, and prices declined.6
Company News7
Advanced Micro Devices Inc. (AMD), Alphabet Inc. (GOOG), Meta Platforms Inc. (META). Nvidia Corp. (NVDA) and Palo Alto Networks Inc. (PANW), all holdings in the Core Select and G33 strategies, rose between 4.30% and 5.23% last week on rising expectations for strong quarterly revenue and earnings reports in the coming weeks. This growth is based on progress in artificial intelligence and stabilizing technology spending.
CME Group Inc. (CME), a G50 holding, rose 5.85% last week after the exchange operator and financial risk management company reported average daily volume was its second highest on record for both the month of September and its third quarter.
Did you know…
Just like people, huskies need to train to be better distance runners. While the average pet husky can only run between 10 to 20 miles a day, a well-conditioned race husky can run for 11 hours straight making up to 125 miles. They can repeat this distance for up to 10 days in a row.
Mariann Montagne, CFA
Portfolio Management Consultant
Sources:
1 JP Morgan Weekly Market Recap 10-9-23
4 Energy Information Administration (Total Motor Gasoline) 10-4-23
5 US Bureau of Labor Statistics 10-6-23
6 Institute of Supply Management 10-2-23
7 All weekly changes in company stock prices: Yahoo Finance
8 Barron’s, “Big Cap Stocks Have Taken a Beating. The Case for Buying Them Now” 10-5-23