Market Indexes: 3 out of 4 indexes fell this past week, with only the Russell small caps finishing in positive territory, 0.39%. The DOW was down over -2% so far in September, while the S&P was close behind, down -2%.
“World shares fell on Friday, pressured by concerns over China’s markets, the potential for a U.S. corporate tax hike and an update on the U.S. Federal Reserve’s tapering strategy next week. The Federal Reserve, facing a labor market that may be stalling or on the cusp of a surge, is expected next week to open the door to reducing its monthly bond purchases while tying any actual change to U.S. job growth in September and beyond.
“The big test comes as we move past the Delta wave – we will see how long it takes to loosen up the supply side of the economy,” wrote Bank of America economist Michelle Meyer. “Whether the supply constraints are fleeting or persistent matters for the Fed. The former allows for easy policy to continue.”
"The U.S. 10-year treasury note yield rose to touch a two-month high, and the dollar touched a three-week high.” (Reuters)
Volatility: The VIX was ~flat last week, down -0.05%, ending the week at $20.81.
High Dividend Stocks: These high dividend stocks go ex-dividend this week: Apollo Investment Corp (NASDAQ:AINV), Stonecastle (NASDAQ:BANX), Dynex Capital (NYSE:DX), Gladstone Capital (NASDAQ:GLAD), Gladstone Commercial (NASDAQ:GOOD), Gladstone Investment (NASDAQ:GAIN), LTC Properties (NYSE:LTC), New York Mortgage Trust (NASDAQ:NYMT), OFS Capital (NASDAQ:OFS), Redwood Trust (NYSE:RWT), SLR Investment (NASDAQ:SLRC), SLR Senior Investment (NASDAQ:SUNS), and Pembina Pipeline (NYSE:PBA).
Market Breadth: 9 out of 30 DOW stocks rose this past week, vs. 5 the week previous. 41% of the S&P 500 rose, vs. 16% last week.
FOREX: The US $ rose vs. other major currencies again last week.
Economic News
Core CPI fell in August, while Retail Sales rose. Both the NY and Philadelphia Mfg. Indexes rose.
“U.S. consumers’ expectations for how much inflation will change over the next year and the coming three years rose last month to the highest levels since 2013, according to a survey released on Monday by the New York Federal Reserve.
"Year-ahead inflation expectations increased for the 10th straight month to a median of 5.2% in August, according to the monthly survey of consumer expectations. Inflation expectations over the next three years increased to a median of 4.0%. Both metrics are at the highest they’ve ever been for the survey, which was launched in 2013.” (Reuters)
Week Ahead Highlights: Investors will get additional readings on the health of the U.S. economy next week with the release of consumer price index figures, retail sales, and a measure of consumer sentiment.
Coming Week’s US Economic Reports: Investors await the Fed’s meeting this week, and will will focus on the Fed’s timeline for tapering asset purchases.
Sectors: Energy sector led this week, with Utilities lagging.
Futures: WTI crude rose .61%, ending at $69.17.
“OPEC said on Monday that demand for oil was expected to rebound above pre-pandemic levels next year.
In its Monthly Oil Report, the group said that it expected oil demand to average 100.8 million barrels per day in 2022, compared with just over 100 million barrels a day in 2019 before the pandemic took hold. China, for instance, is expected to consume almost 15 million barrels a day in oil next year, 1.5 million barrels a day more than it burned in 2019.
The pandemic slammed oil demand, which plummeted by around nine million barrels a day last year, or about 9 percent, OPEC said. Oil consumption has recovered strongly, but the emergence of the fast-spreading Delta variant has applied the brakes. Now, OPEC expects some of the recovery in oil demand previously forecast this year to be put off until 2022.” (NY Times)
