Weekly Market Insights: Stocks Remain Stagnant, Waiting on Fed

Investors had a mixed week as they analyzed new economic data, leaving stocks roughly where they started. The Dow Jones Industrial Average increased by 0.12%, but the Standard & Poor’s 500 decreased by 0.16%. Meanwhile, the Nasdaq Composite index fell by 0.39% over the week. On the other hand, the MSCI EAFE index, which tracks developed overseas stock markets, managed to gain 1.23%.

Stocks Struggle for Direction

Throughout the week, the stock market remained stagnant without any significant changes. On Thursday, investors were optimistic about the European Central Bank's announcement that its rate-hiking campaign is nearing its end and a successful IPO that boosted confidence in the capital markets. Additionally, investors were pleased with the better-than-expected retail sales report and the slight increase in core producer prices, even though the headline number was higher than anticipated.

However, on Friday, the positive sentiment was short-lived as the drop in consumer confidence, negative news in the semiconductor industry, and a labor strike at major automakers caused concerns and reversed Thursday's optimism. As a result, major averages ended the week with a mixed close.

Inflation Progress Stalls

In August, the rate of inflation in the U.S. rose by 0.6%, the highest it has been all year, mainly due to a surge in gasoline prices. The Consumer Price Index also increased by 3.7% compared to the previous year, which is higher than July's 3.2% annual rate. However, core inflation, which excludes energy and food, was more positive, rising by 4.3%, down from July's reading of 4.7%.

Furthermore, producer prices increased by 0.7% in August, which is higher than the anticipated 0.4% increase and the largest monthly gain since June 2022. The year-over-year increase was a more modest 1.6%. Gasoline prices played a significant role in this increase. Excluding food and energy, prices were in line with expectations, rising by 0.2% in August.

This Week: Key Economic Data

Tuesday: Housing Starts. 

Wednesday: FOMC Announcement.

Thursday: Jobless Claims. Existing Home Sales. Index of Leading Economic Indicators.

Friday: Purchasing Managers’ Index (PMI) Composite Flash.

^{Source: Econoday, September 15, 2023}

You can find a list of upcoming U.S. economic data releases, Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials on the Econoday economic calendar. The information provided is believed to be accurate and trustworthy, but it is important to note that the forecasts and forward-looking statements are based on assumptions and may not come to fruition. Additionally, the forecasts may be revised at any time.

This Week: Companies Reporting Earnings

Tuesday: AutoZone, Inc. (AZO)

Wednesday: FedEx Corporation (FDX), General Mills, Inc. (GIS)

Thursday:Darden Restaurants, Inc. (DRI)

^{Source: Zacks, September 15, 2023}

Please note that the companies mentioned in this text are for informational purposes only and should not be construed as a solicitation for the purchase or sale of securities. Investing involves risks, and it is essential to base investment decisions on your goals, time horizon, and risk tolerance. The return and principal value of investments may fluctuate as market conditions change, and when sold, investments may be worth more or less than their original cost. Please be aware that companies may reschedule their earnings reports without prior notice.

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Food For Thought

"I want to believe that there is a mountain so high that I will spend my entire life striving to reach the top of it."

– Cicely Tyson

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Tax Tip

How to Apply for Tax-Exempt Status for Organizations

To apply for tax-exempt status under Section 501(c)(3), an organization needs to fill out a Form 1023-series application and submit a complete application along with the user fee. The organization should also have its employer identification number. If an organization is required to apply for the recognition of exemption, it must notify the Internal Revenue Service (IRS) within 27 months of its formation date.

However, some organizations, such as churches or public charities with annual gross receipts less than $5,000, may not need to apply for 501(c)(3) status to be tax-exempt. When the IRS determines that an organization qualifies for exemption under Section 501(c)(3), it will also be classified as a foundation, unless it meets the requirements to be a public charity.

Please note that this information is not intended to replace individualized tax advice. It is recommended that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

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Healthy Living Tip

Health Supplements: Are They Worth the Hype?

Many over-the-counter supplements for brain health claim to improve memory and promote better attention and focus. However, the FDA does not regulate product testing or ingredient accuracy for these supplements. Instead, it only monitors supplements that make health claims in treating specific diseases. Therefore, a brain health supplement can claim it helps with mental alertness or memory loss without any scientific backing. Most brain health supplements contain omega-3 fatty acids, like those found in fish oil. Rather than relying on supplements, health professionals recommend maintaining a healthy diet full of nutritious fats, vitamins, and minerals. Additionally, exercising your brain can help with memory retention. Learning something new is a great way to keep your brain active.

Tip adapted from Harvard Medical School⁷

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Weekly Riddle

How can you turn the Roman numeral for 9 (IX) into 6 by merely drawing a single, continuous line?

Last week’s riddle:  Take a left-handed glove and turn it inside out. Which of your hands will it now fit – the left or the right? Answer: It will fit your right hand.

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Photo Of The Week

Canary Pine Tree Landscape at Cumbre Vieja Volcanic Area 

Footnotes and Sources

^{1. The Wall Street Journal, September 15, 2023.}

^{2. The Wall Street Journal, September 15, 2023.}

^{3. The Wall Street Journal, September 15, 2023.}

^{4. The Wall Street Journal, September 13, 2023.}

^{5. CNBC, September 14, 2023.}

^{6. IRS.gov, January 31, 2023.}

^{7. Harvard Medical School, August 8, 2023.}

Investing always involves risks, and so your investment decisions should be based on your own goals, time horizon, and tolerance for risk. It's important to understand that the return and principal value of investments will fluctuate as market conditions change. When you sell your investments, they may be worth more or less than their original cost.

Forecasts or forward-looking statements are based on assumptions, and they may not materialize as expected. They are also subject to revision without any notice.

The market indexes discussed in this text are unmanaged, and they are generally considered representative of their respective markets. It is important to note that index performance is not indicative of the past performance of a particular investment. Additionally, indexes do not incur management fees, costs, and expenses. For individuals, it is not possible to directly invest in unmanaged indexes. It is also important to note that past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index, which is considered representative of large-capitalization companies on the U.S. stock market. The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market, and it is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI), and it serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed-income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

It is always a good idea to consult your financial professional for additional information.

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