Weekly Market Insights: Will Interest Rates Rise?

Investor sentiment was affected by concerns over the possibility of the Fed raising interest rates, resulting in a decline in stocks during the holiday-shortened trading week. The Dow Jones Industrial Average decreased by 0.75%, while the Standard & Poor’s 500 dropped by 1.29%. The Nasdaq Composite index experienced a decline of 1.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.28%..^1,2,3

Stocks Resume Their Decline

Last week, stocks experienced a decline due to rising bond yields and higher oil prices. Technology shares bore the brunt of the decline. Economic data reflecting higher prices, rising labor costs, and fewer-than-forecast initial jobless claims dented hopes that the Fed may not find it necessary to raise interest rates. The inflationary implications of higher oil prices also contributed to the growing sense that the Fed may implement additional rate hikes. While bond traders generally still expect no rate hike in September, the likelihood of a 0.25% rate hike or higher in November jumped to 43.3% by Friday morning from 35.4% a week ago.

Oil Prices Spike

Saudi Arabia and Russia announced last week that they would extend their oil production cuts until the end of this year. This news came as a surprise to investors who had expected the cuts to end in October. The announcement caused oil prices to rise due to concerns of a supply shortage during the winter months, with the West Texas Intermediate (WTI) oil price reaching a 10-month high. However, the increase in oil prices has also raised concerns about the Fed's ability to control inflation, which could potentially lead to the Fed raising interest rates above market expectations.

This Week: Key Economic Data

Wednesday: Consumer Price Index (CPI).

Thursday: Jobless Claims. Producer Price Index (PPI). Retail Sales.

Friday: Consumer Sentiment. Industrial Production.

^{Source: Econoday, September 8, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Thursday: Adobe, Inc. (ADBE)

^{Source: Zacks, September 8, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

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Food For Thought

"Do not merely practice your art, but force your way into its secrets; it deserves that, for only art and science can exalt man to divinity."

– Ludwig van Beethoven

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Tax Tip

Give Back to Your Community By Working as a Tax Volunteer

If you are interested in giving back to your community and assisting people with low to moderate incomes, you may want to consider volunteering with the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs. These programs provide free tax assistance to senior citizens, persons with disabilities, and those with limited English proficiency to help them better understand their tax situations.

~~~~~~ Here are some of the perks of being a VITA or TCE volunteer: ~~~~~~

• Flexible hours: Generally, volunteers contribute 3-5 hours per week. Some sites are open all year, but most programs are available from January–April.
  
  
• Convenience: Thousands of VITA and TCE sites exist in neighborhoods across the country, so it's convenient to volunteer at a location close to you. Usually, these locations are in community centers, libraries, schools, and malls.
  
  
• No experience needed: You don't have to be a tax pro to volunteer because all volunteers receive special training and can serve in various roles.

Tip adapted from IRS.gov⁶

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Healthy Living Tip

What to Look for on a Nutrition Label

Understanding how to read nutrition labels is crucial for making healthier food choices. The serving size is the first piece of information you'll see on a label, indicating the number of calories in a single serving. The next section details the nutrients, helping you determine the nutritional value of the food. It's important to pay attention to the amounts of saturated fat and added sugars. Finally, the % daily value (DV) tells you the percentage of each nutrient in a single serving, based on the recommended daily intake. By carefully examining nutrition labels, you can make informed decisions about the foods you eat.

Tip adapted from American Heart Association⁷

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Weekly Riddle

Take a left-handed glove and turn it inside out. Which of your hands will it now fit – the left or the right?

Last week’s riddle: You enter a college classroom with 13 22-year-olds, 10 21-year-olds, and 14 20-year-olds. How many people are in the room? Answer: 38 people (you plus the 37 students who are already in the room to begin with).

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Photo Of The Week

Jal Mahal (Water Palace), Man Sagar Lake, Jaipur, Rajasthan, India

Footnotes and Sources

^{1. The Wall Street Journal, September 8, 2023}

^{2. The Wall Street Journal, September 8, 2023}

^{3. The Wall Street Journal, September 8, 2023}

^{4. CME Group, September 8, 2023}

^{5. Reuters, September 5, 2023}

^{6. IRS.gov, January 11, 2023}

^{7. American Heart Association, April 24, 2023}

^{Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.}

^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and 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 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.}

^{Please consult your financial professional for additional information.}

^{This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.}

^{Copyright 2023 FMG Suite.}