We hope that everyone who started school this week had a wonderful first week back! Laura and I have loved all the first day of school photos – if you have one you'd like to share with us, we would love for you to reply to this email with it. Also, earlier this week, Diazo sent out our first edition of our Concierge Highlight. Each month, around the 10th or so, we plan to send out more information about some of our trusted partners for your information. This month's edition featured Patrick Maffio, a Fitness Specialist. You can check out his page by clicking here!
And now onto the weekly recap:
The Dow Jones Industrial Average eked out a slim gain while the S&P 500, Nasdaq, and Russell 2000 all registered losses. Trading this week reflected a consolidation mindset that has taken root in August after a huge, and nearly unabated, run for the stock market since late March. The S&P 500 for its part closed below the 4,500 level on Friday.
This week also featured some sessions with below-average volume at the NYSE, reflecting a lack of participation on this first week full week of August.
There were a number of news catalysts that gave market participants an excuse to take money off the table this week. Global growth concerns were piqued by weaker-than-expected trade data for July and much weaker than expected new yuan loan growth for July out of China, along with a warning from Chinese property developer Country Garden Holdings that it anticipates losing nearly $8 billion in the first half of 2023.
Also, a slate of U.S. economic data was mixed in aggregate. Total CPI and core-CPI were both spot-on with consensus estimates while the Producer Price Index for July was hotter than expected at the headline level, but not really too hot after accounting for downward revisions for June. Initial jobless claims, meanwhile, continue to run well below recession levels.
Earlier in the week, Moody's downgraded the credit ratings for 10 smaller U.S. banks and put some bigger banks on watch for downgrade, which also contributed to the consolidation mindset.
On the earnings front, Dow component Walt Disney (DIS) was a winning standout, jumping 3.2% on the week after reporting results, while UPS (UPS) sank after it issuing disappointing FY23 revenue outlook, citing weakening e-commerce demand and an expectation for lower volumes following the improved labor contract for the lowered guidance.
The S&P 500 energy (+3.5%) and health care (+2.5%) sectors led the outperformers while the information technology sector (-2.9%) saw the largest decline.
Treasury yields continued to climb this week, acting as another limiting factor for equities. The 2-yr note yield rose 11 basis points to 4.89% and the 10-yr note yield rose nine basis points to 4.17%.
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The data provided is for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. The information contained here is not guaranteed as to accuracy or completeness. All economic and performance information is historical and does not guarantee future results.
The Dow Jones Industrial Average is a price-weighted index comprising 30 widely traded blue chip U.S. common stocks. The NASDAQ Composite Index is a market-value-weighted index of all common stocks listed on the NASDAQ stock exchange. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The MSCI Europe, Australasia, and Far East (EAFE) Index tracks the performance of publicly traded large- and mid-cap stocks of companies in those regions. The Cboe Volatility Index (VIX) shows the market’s expectation of 30-day volatility and is constructed using the implied volatilities of a wide range of S&P 500 Index options. Weekly and year-to-date figures for the VIX show percentage changes, not investment returns. The Russell 2000 Index tracks the performance of approximately 2,000 publicly traded small-cap companies in the United States. It is not possible to invest directly in an index.
The Treasury yield curve is derived from available U.S. Treasury securities trading in the market and is provided directly by the U.S. Federal Reserve. The spread measures the difference in yield between two government securities. A normal (positive) yield curve occurs when longer-term rates are higher than shorter-term rates. The opposite holds true for an inverted yield curve. Year-to-date changes in U.S. Treasury bond yields are shown in basis points (bps). One hundred basis points equals one percent.
Oil prices are represented by West Texas Intermediate (WTI) crude oil.
The G20 countries comprise a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85% of global gross domestic product, and over 75% of global trade.