This week our Stanley Cup Champion Vegas Golden Knights raised the championship banner from last season, and promptly opened the season with a solid 4-1 win over our rival, the Seattle Kracken!
Spooky season is upon us, with decorations being put up and the kids getting very excited for their "haul" of impending candy! What do you have planned for the Halloween holiday?
**Friendly reminder that the IRS tax filing deadline for those of you have filed an extension is Monday October 16th.
And now onto the weekly recap:
Market participants entered the week with news that Israel declared war on Hamas after a surprise attack launched by Hamas last weekend. The potential for a wider regional clash weighed on sentiment this week, but reports so far give the impression that the Israel-Hamas war is still a two-party conflict.
Geopolitical angst mounted on Friday following news that Israel warned 1.1 million residents in the northern Gaza Strip to evacuate within 24 hours, which is presumably a pretense to a ground attack in Gaza that will escalate the war. That created some nervousness in the market, which also heard Iran's foreign minister say that Israel's continued siege of Gaza "will face reactions in other areas."
The stock market still fared okay this week, aided by a decline in Treasury yields and some technical buying interest related to the idea that the market was oversold and due for a bounce. Gains were registered in the first half of the week, but buyer conviction fell by the wayside as it got closer to the weekend.
While this week's Producer Price Index and Consumer Price Index reports were not as friendly as investors envisioned, the 10-yr note still did well with the help of safe-haven flows and expectations that inflation rates will improve in coming months as higher rates work in slowing the economy. The 2-yr note yield fell one basis point this week to 5.05%, but the 10-yr note yield declined 15 basis points to 4.63%.
The Treasury market also weathered some relatively disappointing auction results this week for the 3-yr note, 10-yr note, and 30-yr bond. Each was met with relatively soft demand, which came to a head on Thursday following the 30-yr bond auction, prompting a noticeably back up in rates. When geopolitical angst picked up on Friday, however, a rush of safe-haven flows repaired a lot of the weakness following Thursday's sell off.
Treasuries were also digesting comments from several Fed officials this week who spoke to the idea that the rise in long term rates had tightened financial conditions and may give them leeway to precede carefully on the policy rate.
Oil prices climbed this week in another manifestation of geopolitical worries. WTI crude oil futures jumped 6.0% to $87.80/bbl.
Eight of the S&P 500 sectors registered a gain with energy (+4.5%) leading by a wide margin. The consumer discretionary sector (-0.7%) saw the largest decline.
Earnings season kicked off this week with generally good results, highlighted by JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and UnitedHealth (UNH).
In other news, the House failed to elect a new Speaker this week. Rep. Steve Scalise (R-LA) prevailed in the GOP conference vote, but withdrew his name after failing to get enough support. This leadership void is a reminder that the House can't conduct business, which raises the uncertainty about Congress reaching a budget agreement before the Nov. 17 deadline.
| INDEX | STARTED WEEK | ENDED WEEK | CHANGE | % CHANGE | YTD % |
|---|---|---|---|---|---|
| DJIA | 33407.50 | 33670.20 | 262.70 | 0.8 | 1.6 |
| Nasdaq | 13431.30 | 13407.20 | -24.10 | -0.2 | 28.1 |
| S&P 500 | 4308.50 | 4327.78 | 19.28 | 0.4 | 12.7 |
| Russell 2000 | 1745.56 | 1719.71 | -25.85 | -1.5 | -2.4 |
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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.