We were closed yesterday for the holiday, so you’re receiving this on Tuesday rather
than our normally scheduled Monday mornings.
THE WEEK ON WALL STREET
The overhang of bumping against the federal debt ceiling was lifted last week with
an agreement to extend the debt ceiling through early December, helping propel
stocks to a weekly gain. The Dow Jones Industrial Average increased by 1.22%,
while the Standard & Poor’s 500 added 0.79%. The Nasdaq Composite index gained
0.09%. The MSCI EAFE index, which tracks developed overseas stock markets, was
DEBT CEILING CONCERNS EVAPORATE, FOR NOW…
After suffering losses on concerns over delays with raising the federal debt ceiling,
stocks rebounded as the Senate moved toward finalizing a debt ceiling agreement.
While the agreement is only a short-term solution, it was enough to embolden
investors to buy stocks. The week’s rally ran out of gas on Friday, however, on a
surprisingly weak employment report. Though the debt ceiling was the dominant
concern in the markets last week, the market grappled all week with the headwinds
of higher energy prices, rising bond yields, inflation, and less robust economic
FUZZY EMPLOYMENT PICTURE
Employment remains a confusing and unpredictable element of this post-pandemic
economic recovery. Automated Data Processing’s employment report showed
private sector jobs rose by a robust 568,000. This hiring surge may have been aided
by the end of extended unemployment benefits and the return of children to school.
This improving labor outlook was reinforced the following day as weekly initial
jobless claims fell below their four-week moving average, while continuing claims
fell by nearly 100,000. The employment report on Friday was a different story. The
economy added a disappointing 194,000 jobs, making September the slowest
month for job growth this year. The unemployment rate declined to 4.8%, while an
increase in wages generated inflation worries.
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: JOLTS (Job Openings and Labor Turnover Survey).
Wednesday: Consumer Price Index. FOMC (Federal Open Market Committee)
Thursday: Jobless Claims.
Friday: Retail Sales. Consumer Sentiment.
THE WEEK AHEAD: NOTABLE COMPANIES REPORTING EARNINGS
Wednesday: JPMorgan Chase (JPM), Goldman Sachs (GS), Delta Airlines (DAL),
BlackRock, Inc. (BLK).
Thursday: Wells Fargo & Company (WFC), UnitedHealth Group (UNH), Citigroup,
Inc. (C), Walgreens Boots Alliance, Inc. (WBA), Morgan Stanley (MS).
Friday: J.B. Hunt Transportation, Inc. (JBHY), The PNC Financial Services Group, Inc.
Earnings season is upon us, which will set the tone for the remainder of the year. At
least until December when the debt ceiling debacle will pop up again. September
and October thus far have been their traditional seasonally weak selves as the
market has corrected a bit the past month and a half. However, many think we
could see a bit of a rally into year-end if corporate earnings and guidance will
support it. The Delta variant of Covid is rolling over in the south, but may not have
peaked yet in some northern states. This could have a bit of an impact were it to get
really out of hand, but many of the northern states have more mitigation procedures
in place that will hopefully help keep cases to a minimum.
Have a great week!
THIS WEEK'S UPDATE
October 12, 2021|