A strong two-day rally in equities cemented a positive week for investors as the new trading month began. The Dow Jones Industrial Average rose 1.99% and the Standard & Poor’s 500 rose 1.51%. The Nasdaq Composite Index rose 0.73% in a week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 3.42%.1,2,3
Stocks start strong
Stocks kicked off the week with their best two-day gains since March 2020 as the UK Prime Minister’s decision to withdraw a tax cut proposal that roiled financial markets the previous week lifted investors.Four
Falling yields further fueled investor enthusiasm, as did new economic data pointing to a cooling economy. The declines over the past two days wiped out most of the gains as concerns about rising interest rates and recession once again came to the fore. The selling pressure came from a series of hawkish comments by Fed officials and labor market data suggesting the Fed would likely stick to its plan to raise rates.
mixed labor pictures
Employment reports provided conflicting signals about the state of the labor market. In a sign of a cooling down, job openings fell by 10% in August, but subsequent Automatic Data Processing (ADP) reports show continued strength in the labor market. The ADP reported that private employers added 208,000 more jobs to him in September than expected, with annual wages up 7.8% from his year earlier.5,6
Jobless claims rose to 219,000 from the previous week’s 190,000, in line with the 2019 average. Employers added 263,000 jobs to him, according to the September jobs report, which was slightly below expectations. The combination of new jobs and falling labor force participation has pushed the unemployment rate down to his 3.5%.7,8
This Week: Key Economic Data
- Wednesday: Producer Price Index (PPI). Minutes of the Federal Open Market Committee (FOMC).
- Thursday: Consumer Price Index (CPI). Unemployment insurance claim.
- Friday: retail sales.
This Week: Companies Reporting Earnings
- Wednesday: Delta Air Lines (DAL), PepsiCo (PEP).
- Thursday: Wells Fargo & Company (WFC), Walgreens Boot Alliance (WBA), BlackRock (BLK).
- Friday: JPMorgan Chase & Co. (JPM), UnitedHealth Group, Inc. (UNH), Citigroup, Inc. (C), Morgan Stanley (MS), PNC Financial Services Group, Inc. (PNC), US Bancorp (USB).
Footnotes and citations
- Wall Street Journal, October 7, 2022
- Wall Street Journal, October 7, 2022
- Wall Street Journal, October 7, 2022
- CNBC, Oct. 3, 2022
- Wall Street Journal, October 4, 2022
- CNBC, Oct. 5, 2022
- Wall Street Journal, October 6, 2022
- CNBC, Oct. 7, 2022
- IRS.gov, May 19, 2022
- Greatist.com, May 26, 2022
Paul Ellis, CIMA® Please contact 425.405.7720 or paul.ellis@elliswealthmanagement.net.
www.elliswealthmangement.net
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