September 30 - October 4 Week in Review

It was a tumultuous week on Wall St last week with most of the major averages moving lower. Several economic reports aroused growth concerns among investors and contributed to a heavy bout of selling early in the week. The market was able to end the week on a positive note after the jobs report for September calmed investors nerves. For the week the S&P 500 declined 0.3%, the Dow Jones Industrial Average lost 0.9%, and the Russell 2000 lost 1.3%. The Nasdaq Composite was the sole bright spot, gaining 0.5%.

Five S&P 500 sectors finished lower, while six finished higher. The energy, materials, industrials, and financials sectors posted big losses, as did the Dow Jones Transportation Average. The information technology and health care sectors showed relative strength. The Philadelphia Semiconductor Index rose 2.0%.

Video 10.08.2019

Last week's market moving reports included the ISM Manufacturing Index, ISM Non-Manufacturing Index, and the Employment Situation Report. The ISM Manufacturing Index for September declined to 47.8% from 49.1% in August for its worst reading since June 2009. The ISM Non-Manufacturing Index for September fell to 52.6% from 56.4% in August. September nonfarm payrolls increased by 136,000 following upward revisions in August and July. The unemployment rate dropped to 3.5%, which is the lowest since December 1969. Average hourly earnings were flat.

The reports and the continued weakness in the manufacturing sector made investors nervous about the prospects for earnings and valuations, especially if the weakness carried over to the consumer-oriented services sector.

As a result the S&P 500 was down over 4% in less than three sessions to start the week. However, an opportunistic mindset took hold, which likely contributed to some short-covering activity. The buy-the-dip mentality was further encouraged on Friday after the employment report showed modest jobs growth.

Helping to lead the markets recovery was Apple, which gained 3.7% for the week, with most of that coming on Friday. JP Morgan raised its price target to $265 from $243 and the Nikkei Asian Review reported it asked its suppliers to increase iPhone 11 production by up to 10%.

Also last week Charles Schwab eliminated commissions for stocks, ETFs, and options listed on U.S. or Canadian exchanges. E*Trade and TD Ameritrade followed suit shortly thereafter. All three companies posted huge losses for the week.

In the bond market U.S. Treasury yields continued to decline amid growth concerns and growing expectations for the Fed to cut rates not only in October but, also in December. The 2 year yield fell 23 basis points to 1.39%, and the 10 year yield fell 16 basis points to 1.52%.

In other markets the U.S. Dollar Index declined 0.3% to 98.74 and WTI crude dropped 5.6% to $52.78 a barrel, pressured by rising inventory levels.

October 7 – October 11 Economic Calendar

  • Monday
  • TD Ameritrade IMX
    12:30 PM ET
  • Jerome Powell Speaks
    1:00 PM ET
  • Consumer Credit
    3:00 PM ET
  • Tuesday
  • NFIB Small Business Optimism Index
    6:00 AM ET
  • PPI-FD
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Jerome Powell Speaks
    1:50 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
    10:00 AM ET
  • Wholesale Trade
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Jerome Powell Speaks
    11:00 AM ET
  • FOMC Minutes
    2:00 PM ET
  • Thursday
  • CPI
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Treasury Budget
    2:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Import and Export Prices
      8:30 AM ET
    • Consumer Sentiment
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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