Weekly Updates

Market Update -September 2

Just a week ago we were here congratulating you on surviving a fairly anti-climactic Hurricane Hilary, just to be hit by actual flooding from your status quo monsoon season scattered rainstorms in the valley yesterday. We hope everyone is safe and dry going into the weekend!

In the Long house, Gage and JJ started their first day of 6th grade and 1st grade, respectively. As usual, it was a chaotic but blessing-filled first week back.

And now onto the weekly recap:

2023 Weekly Market Update Cover (1200 × 628 px) (4)-3

It was a fairly strong week for stocks that results in decent gains for the major indices. Some softer price action at the end of the week was offset by sizable gains in the first half of the week. Including last Friday, the major indices registered four consecutive winning sessions at Wednesday's close. This week's upside moves had the S&P 500 reclaim a position above its 50-day moving average. 

Broad based gains reflected market participants' willingness to buy on weakness, aided by a big drop in market rates. Overall, there just wasn't a lot of conviction on the part of sellers. Many of this week's sessions featured below-average, which is not out of the ordinary for the last week of August ahead of Labor Day weekend. 

Mega cap stocks took charge, benefitting from the drop in market rates. The Vanguard Mega Cap Growth ETF (MGK) rose 3.6% this week and the Invesco S&P 500 Equal Weight ETF (RSP) rose 2.3%. 

The 2-yr note yield fell 17 basis points this week to 4.88% and the 10-yr note yield fell seven to 4.17%. Those moves were in response to a batch of economic data that wasn't too bad, but wasn't too good either. Slightly weaker than expected economic reports were a good thing in the market's eyes as it relates to Fed policy. That is to say, market participants have been waiting for data to corroborate the notion that the Fed won't raise rates again. 

The economic calendar this week featured the August Consumer Confidence Index, July JOLTS - Job Openings Report, the second estimate for Q2 GDP, July Personal Income and Spending, the August ISM Manufacturing Index, and the August Employment Situation Report.

A big move in oil prices was lurking under the radar this week. WTI crude oil futures jumped 2.3% on Friday, which brought this week's percentage gain to 7.8%, to $85.55/bbl. That move in oil prices underpinned strength in the S&P 500 energy sector, up 3.8% this week, but also raised eyebrows as it relates to inflation staying persistently high.

Aside from energy, the information technology (+4.4%), consumer discretionary (+3.0%), and communication services (+3.5%) sectors saw the largest gains. The countercyclical utilities (-1.7%) and consumer staples (-0.3%) sectors were the lone holdouts to close with a loss this week.

On the earnings front, Dow component Salesforce (CRM) was a standout winner following its quarterly results and guidance. Retailers Dollar General (DG) and Five Below (FIVE) sank after reporting quarterly results that featured below-consensus guidance while Best Buy (BBY) and lululemon athletica (LULU) jumped after their earnings report. 

As a reminder, equity and bond markets will be closed on Monday for Labor Day.

  • Nasdaq Composite: +3.3% for the week / +35.1% YTD
  • S&P 500: +2.5% for the week / +17.6% YTD
  • S&P Midcap 400: +3.5% for the week / +9.9% YTD
  • Russell 2000: +3.6% for the week / +9.1% YTD
  • Dow Jones Industrial Average: +1.4% for the week / +5.1% YTD




The stock market started the last week of August on an upbeat note. The major indices settled the session near their best levels of the day on extremely light volume at the NYSE. The positive bias was partially fueled by carryover upside momentum from Friday's rebound effort that took root after some knee-jerk selling in response to Fed Chair Powell's speech at the Jackson Hole Symposium.

The major indices exhibited some choppy behavior as a result of fickle price action in the mega cap stocks, but they never slipped into negative territory due to broad buying under the index surface. NVIDIA (NVDA) had been down as much as 2.5% at its low of the day, but closed with a 1.8% gain.

The Vanguard Mega Cap Growth ETF (MGK) rose 0.7%, the Invesco S&P 500 Equal Weight ETF (RSP) rose 0.8%, and the market-cap weighted S&P 500 rose 0.6%.

3M (MMM) was a standout winner, pacing the Dow Jones Industrial Average and the S&P 500 industrials sector (+0.8), following reports that the company is nearing a $5.5 billion settlement in the military earplugs case.

On the M&A front, the FTC filed a motion to withdraw matter from adjudication regarding Amgen's (AMGN) bid to acquire Horizon Therapeutics (HZNP), Danaher (DHR) is acquiring Abcam (ABCM) for $24.00 per share in cash, Kimco Realty (KIM) is acquiring RPT Realty (RPT) in an all-stock transaction, and KSL Capital Partners is acquiring Hersha Hospitality Trust (HT) at an approximately 60% premium of $10.00 per share in cash.

There was no U.S. economic data of note on Monday.


It was another strong day for stocks on light volume. A big drop in market rates provided the positive catalyst for stocks. The S&P 500 climbed its 50-day moving average (4,460) shortly after the open and ultimately settled just a whisker shy of the 4,500 level. All the major indices settled near their highs of the day.

Treasury yields dropped sharply following the release of the July JOLTS - Job Openings Report and August Consumer Confidence Index at 10:00 a.m. ET. Both of those reports were weaker than expected, which is a good thing in the market's eyes as it relates to Fed policy.

Mega caps and other growth stocks led the upside charge, reacting positively to the drop in market rates. The Vanguard Mega Cap Growth ETF (MGK) jumped 2.0% and the Russell 3000 Growth Index rose 1.9%.

A gain in Best Buy (BBY) following its earnings results and outlook provided an additional boost to the consumer discretionary sector.

Reviewing Tuesday's economic data:

  • June FHFA Housing Price Index 0.3%; prior 0.7%
  • June S&P Case-Shiller Home Price Index, Yr/Yr -1.2% vs Briefing.com consensus of 0.9%; Prior -1.7%
  • August Consumer Confidence 106.1 vs Briefing.com consensus of 116.0; Prior was revised to 114.0 from 117.0
    • The key takeaway from the report is that receding optimism about employment conditions negatively affected consumers' view of the present situation and outlook.
  • July JOLTS - Job Openings 8.827 mln vs Briefing.com consensus of ; Prior was revised to 9.165 mln from 9.842 mln

The stock market logged its fourth consecutive winning session in another lightly traded affair. Upside moves, however, were more subdued compared to recent sessions. The S&P 500, which closed above the 4,500 level, and the Nasdaq Composite finished near their highs of the day thanks to support from the mega cap space.

An initial drop in market rates following this morning's weaker than expected economic data provided added support early on. Treasury yields climbed off their intraday lows, though, as the session progressed.

Relative strength from the mega cap space was the biggest driver of index gains. The Vanguard Mega Cap Growth ETF (MGK) rose 0.7% while the Invesco S&P 500 Equal Weight ETF (RSP) rose 0.3%. The market-cap weighted S&P 500 closed up 0.4%.

Ambarella (AMBA) plunged after reporting better than expected earnings, but issuing Q3 revenue guidance that was well below consensus. HP Inc. (HPQ) was another notable loser after reporting EPS that was in line with expectations, but moderated its expectations for Q4 (Oct), largely driven by a continued aggressive pricing environment in PCs, sluggish demand in China, and enterprise demand softening.

Meanwhile, Hewlett Packard Enterprise (HPE) garnered a positive reaction after beating earnings estimates.

Reviewing Wednesday's economic data:

  • Weekly MBA Mortgage Applications 2.3%; Prior was -4.2%
  • August ADP Employment Change 177K vs Briefing.com consensus of 195K; Prior was revised to 371K from 324K
  • July Adv. Intl. Trade in Goods -$91.2 bln; Prior was revised to -$88.8 bln from -$87.8 bln
  • July Adv. Retail Inventories 0.3%; Prior was revised to 0.5% from 0.7%
  • July Adv. Wholesale Inventories -0.1%; Prior was revised to -0.7% from -0.3%
  • Q2 GDP - Second Estimate 2.1% vs Briefing.com consensus of 2,4%; Prior was 2.4%
  • Q2 GDP Deflator - Second Estimate 2.0% vs Briefing.com consensus of 2.2%; Prior was 2.2%
    • The key takeaway from the report is that it fits the soft landing scenario; also, there were downward revisions to the inflation readings, which is something that will continue to drive the market's belief that the Fed can refrain from another rate hike.
  • July Pending Home Sales 0.9% vs Briefing.com consensus of -1.3%; Prior was revised to 0.4% from 0.3%

The market's winning streak was broken on Thursday. The market initially moved higher before upside momentum slowly dissipated. The S&P 500 and Dow Jones Industrial Average both closed with a loss near their worst levels of the day while the Nasdaq eked out a slim gain. The muted price action was due to a lack of conviction on either side of the tape.

In general, big moves were reserved for individual stocks with catalysts. Retailers Dollar General (DG) and Five Below (FIVE) sank after reporting quarterly results that featured below-consensus guidance. CrowdStrike (CRWD) and Dow component Salesforce (CRM), meanwhile, registered sizable gains after their earnings reports.

Relative strength in mega cap stocks offered a measure of support to the broader market. The Vanguard Mega Cap Growth ETF (MGK) logged a 0.1% gain while the Invesco S&P 500 Equal Weight ETF (RSP) fell 0.4% and the market-cap weighted S&P 500 fell 0.2%.

Market participants were digesting some otherwise pleasing data that corroborated the understanding that the U.S. economy is not tracking currently at a hard landing pace.

Reviewing Thursday's economic data:

  • Weekly Initial Claims 175K vs Briefing.com consensus of 235K; Last Week was revised to 232K from 230K
  • Weekly Continuing Claims 160K; Last Week was revised to 1.697 mln from 1.702 mln
    • The key takeaway from the report is that initial claims -- a leading indicator -- continue to run at levels that are indicative of a tight labor market that goes hand-in-hand with an economy that is definitely not in a hard-landing pattern.
  • July Personal Income 0.3% vs Briefing.com consensus of 0.3%; June was 0.3%
  • July Personal Spending 0.8% vs Briefing.com consensus of 0.7%; June was revised to 0.6% from 0.5%
  • July PCE Prices 0.2% vs Briefing.com consensus of 0.2%; June was 0.2%
  • July PCE Prices - Core 0.2% vs Briefing.com consensus of 0.2%; June was 0.2%
    • The key takeaway from the report would have to be the uptick in the year-over-year inflation readings. They weren't of the eye-popping variety; however, they should catch the Fed's eye as a basis not to cut rates anytime soon.
  • August Chicago PMI 48.7 vs Briefing.com consensus of 45.0; July was 42.8

Stocks closed out this first day of September on a mixed note. The three main indices closed with only modest gains or losses while the Russell 2000 (+1.1%) outperformed. The S&P 500 maintained a position above 4,500, reaching 4,501 at its low.

A jump in market rates, a view from Cleveland Fed President Mester (2024 FOMC voter) that inflation remains too high, and a sharp increase in oil prices ($85.55/bbl, +1.92, +2.3%) acted as headwinds for the stock market.

The 2-yr note yield rose two basis points today, and fell 17 basis points this week, to 4.88%. The 10-yr note yield rose eight basis points today, and fell seven this week, to 4.17%.

Mega caps and growth stocks were relatively soft, reacting to the bump in rates and cooling off from a stronger showing earlier in the week. The Vanguard Mega Cap Growth closed flat while the Invesco S&P 500 Equal Weight ETF (RSP) logged a 0.4% gain and the market-cap weighted S&P 500 rose 0.2%. The Russell 3000 Value Index rose 0.6% versus a 0.1% gain in the Russell 3000 Growth Index. 

Reviewing Friday's economic data:

  • August Nonfarm Payrolls 187K vs Briefing.com consensus of 175K; July was revised to 157K from 187K
  • August Nonfarm Private Payrolls 179K vs Briefing.com consensus of 160K; July was revised to 155K from 172K
  • August Avg. Hourly Earnings 0.2% vs Briefing.com consensus of 0.3%; July was 0.4%
  • August Unemployment Rate 3.8% vs Briefing.com consensus of 3.6%; July was 3.5%
  • August Average Workweek 34.4 vs Briefing.com consensus of 34.3; July was 34.3
    • Altogether the key takeaway from the report is that it was a Goldilocks report as it pertains to the market's thinking that the Fed won't be raising rates again.
  • August S&P Global US Manufacturing PMI - Final 47.9 (July was 47.0).
  • July Construction Spending 0.7% vs Briefing.com consensus of 0.6%; June was revised to 0.6% from 0.5% "
    • The key takeaway from the report is that residential spending continues to be powered by new single family construction to meet demand that cannot be satisfied through the existing home market.
  • August ISM Manufacturing Index 47.6% vs Briefing.com consensus of 46.7%; July was 46.4%"
    • The key takeaway from the report is that manufacturing demand remains soft, yet conditions in the manufacturing sector, slow they may be, appear to be stabilizing.
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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.