Last week saw a mix of results in the stock market, as hostilities broke out in the Middle East and inflation data came in higher than expected. The Dow Jones Industrial Average increased by 0.20%, while the Standard & Poor's 500 saw a rise of 0.45%. However, the Nasdaq Composite index fell by 0.18% over the course of the five trading days. Meanwhile, the MSCI EAFE index, which tracks developed overseas stock markets, rose by 2.37%.
Inflation Hurts Sentiment
Stocks exhibited remarkable resilience in the face of a surprise attack on Israel and hotter inflation data than investors expected. Stock prices initially buckled on the breakout of hostilities in the Middle East. Still, they rallied in afternoon trading as investors gained optimism that the war may not spread to other countries. Oil and defense stocks rose sharply, while airlines fell.
Despite a surprise attack on Israel and higher-than-expected inflation data, stocks showed impressive resilience. The stock prices initially declined due to the outbreak of hostilities in the Middle East, but they rebounded in the afternoon as investors became more optimistic that the war would not spill over to other countries. Oil and defense stocks saw significant gains, while airlines experienced a decline.
Stocks continued to rise on Wednesday, driven by falling bond yields and a drop in oil prices. However, the market was disappointed by the elevated wholesale inflation report. When the consumer prices also came in higher than expected, stocks fell in response to higher bond yields. This weakness persisted into Friday, despite a solid start to a new earnings season, as consumer inflation expectations increased.
PPI, CPI Updates
Recent inflation data suggests that the trend of decreasing inflation rates may be coming to an end. In September, the Producer Price Index (PPI) exceeded expectations, rising by 0.5% instead of the forecasted 0.3%. Additionally, the year-over-year increase of 2.2% was the largest jump since April, with the surge being driven by a 0.9% increase in goods. Consumer inflation data also came in higher than expected, with the Consumer Price Index (CPI) showing a 0.4% increase in September and a 3.7% increase year-over-year, compared to the forecasted 0.3% and 3.6%, respectively. However, core inflation remained in line with expectations, providing some comfort.
This Week: Key Economic Data
Tuesday: Retail Sales. Industrial Production.
Wednesday: Housing Starts.
Thursday:Existing Home Sales. Jobless Claims. Index of Leading Economic Indicators.
Source: Econoday, October 13, 2023
This Week: Companies Reporting Earnings
Monday:The Charles Schwab Corporation (SCHW)
Tuesday: Bank of America Corporation (BAC), Johnson & Johnson (JNJ), Lockheed Martin Corporation (LMT), The Goldman Sachs Group, Inc. (GS), Prologis, Inc. (PLD), J.B Hunt Transport Services, Inc. (JBHT)
Wednesday: Netflix, Inc. (NFLX), Tesla, Inc. (TSLA), The Procter & Gamble Company (PG), United Airlines Holdings, Inc. (UAL), Abbott Laboratories (ABT), Morgan Stanley (MS), Elevance Health, Inc. (ELV)
Thursday: AT&T, Inc. (T), Intuitive Surgical, Inc. (ISRG), Blackstone, Inc. (BX), CSX Corporation (CSX), Union Pacific Corporation (UNP), Freeport-McMoran, Inc. (FCX)
Friday: SLB (SLB), American Express Company (AXP)
Source: Zacks, October 13, 2023
Food For Thought
"Everyone thinks of changing the world, but no one thinks of changing himself."
Taxpayer Bill of Rights
The Internal Revenue Service (IRS) is available year-round for any questions. They also have a Taxpayer Bill of Rights, which promises the level of service and information you will receive when working with the IRS.
Here are the ten fundamental rights you have as a taxpayer when interacting with the IRS:
Tip adapted from IRS.gov6
Healthy Living Tip
Health Benefits of Garlic
Not only is garlic delicious, but it also has many potential health benefits.
One of the most powerful benefits of garlic is that it may help your immune system and may help you combat sickness, including the common cold. One large, 12-week study found that a daily garlic supplement reduced the number of colds by 63% compared to a placebo. The average length of cold symptoms was also reduced by 70%, from 5 days in the placebo group to just 1.5 days in the garlic group.
Garlic may also improve cholesterol levels, which may lower the risk of heart disease. Garlic may lower both total and LDL cholesterol (otherwise known as the "bad" cholesterol).
So next time you're making your favorite dish, you may want to consider adding a few cloves of garlic to your recipe.
Tip adapted from Healthline.com7
I'm usually made by someone who does not want me. I'm usually bought by someone who does not need me. I'm usually used by someone who never sees me. What am I?
Last week’s riddle: It is round and has a big mouth but never speaks. It is most often in a cabinet. What is it? Answer: A jar.
Photo Of The Week
Mount Hood, Oregon reflected in Trillium Lake
Footnotes and Sources
2. The Wall Street Journal, October 13, 2023
3. The Wall Street Journal, October 13, 2023
4. CNBC, October 11, 2023
5. CNBC, October 12, 2023
6. IRS.gov, February 6, 2023
7. Healthline.com April 24, 2023
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Weekly Market Insights: Middle East Turmoil Cause Inflation Concerns
October 16, 2023