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
This Week: Companies Reporting Earnings
Thursday: Adobe, Inc. (ADBE)
Source: Zacks, September 8, 2023
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
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: ~~~~~~
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
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).
Photo Of The Week
Jal Mahal (Water Palace), Man Sagar Lake, Jaipur, Rajasthan, India
Footnotes and Sources
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
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Weekly Market Insights: Will Interest Rates Rise?
September 12, 2023