The Markets (as of market close August 26, 2022)
Despite evidence that inflation may be slowing, the central bank is committed to fighting inflation, according to last Friday’s speech from Federal Reserve Chair Jerome Powell. Wall Street may have held out hope that the Fed would scale back its aggressive bent to reel in rising prices, but that wish apparently turned to disappointment after Powell stated that “Restoring price stability will likely require maintaining a restrictive policy stance for some time.” In response, traders moved away from stocks, sending each of the major benchmark indexes notably lower. All 11 market sectors of the S&P 500 closed lower, with information technology, communication services, and consumer discretionary declining the furthest. Ten-year Treasury yields closed last week up 5.0 basis points. Crude oil prices rose over $3.00 but remained well below $100 per barrel. The dollar advanced, while gold prices slid lower.
Eye on the Week Ahead
The employment figures for August are released this week. The labor sector has been quite strong for much of the year. July saw over 500,000 new jobs added, while average weekly wages have risen 5.2% over the past 12 months.
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.
