Despite a rally on Friday, major stock indices ended the week lower with the Nasdaq 100 Index suffering the biggest losses. 

The U.S. avoided a partial government shutdown by Congress passing a short term spending bill through December 3^rd.

Manufacturing purchasing manager’s indices showed slowing growth in the U.S., Europe and Japan although the U.S. saw a good increase in durable goods orders. 

Supply chain issues continue to drive up prices for energy and manufactured goods.  The auto industry in particular has been hampered by chip shortages and there is little light at the end of the tunnel.  China is facing blackouts as coal shortages hurt electricity production and China and Europe both face shortages of natural gas for home heating this winter.

The Social Security Trustees released a report dated August 31^st that projects the Social Security Trust fund will deplete in 2033, a year earlier than last year due to the lower payroll tax revenue during the pandemic.  If Congress fails to act, the revenue paid into Social Security will only fund about 76% of benefits in 2034.  One solution projected to make Social Security solvent for the next 75 years would be to increase the payroll tax 1.77% for employees and employers.  However, Congress appears to be ignoring this annual recommendation again.

Treasury yields were higher with the 30-year bond yield closing at 2.031% and the 10-Year note closing at 1.463%.  Crude oil rose to $75.75 a barrel and natural gas rose to $5.546 per MMBTUs.  The U.S. dollar index rose to 94.07 and gold rose to $1761.30 an ounce.

In the economic numbers:

• The Institute for supply management released some of the September purchasing managers indices.  Keep in mind that anything over 50 represents expansion and under 50 represents contraction.
  • U.S. manufacturing PMI fell from 61.1 in August to 60.5 in September.
  • Eurozone manufacturing PMI fell from 61.4 in August to 58.6 in September.
  • Japan manufacturing 52.7 in August to 51.5 in September.
• The Eurozone reported consumer prices have risen 3.4% year over year in September versus 3.0% year over year in August.
• The Commerce Department reported:
  • Consumer spending on goods and services increased 0.8% in August following a 0.1% decline in July.
    • Retail sales rose 0.7%.
  • Personal Income rose 0.2% in August.  This follows a 1.1% increase in July due to the enhanced child tax credit.
  • The personal savings rate was 9.4% in August.
  • The personal consumption price index rose 0.4% in August.  Excluding volatile food and energy prices rose 0.3%.  From a year earlier the PCE index has risen 4.3% and the core PCE has risen 3.6%.
  • Durable goods order rose 1.8% in August following a 0.5% rise in July.
    • From a year earlier durable goods orders have risen 24.7%.
    • Shipments of durable goods have only risen 14.1% due to supply chain bottlenecks

The Labor Department reported: 

• • A seasonally adjusted 362,000 workers filed initial claims for unemployment in the week ending September 25^th, up 11,000 from a revised 351,000 the week before.  
  • The 4-week moving average of claims, designed to smooth out volatility, rose 4,250 to 340,000.
  • Continuing claims were little changed at 2.8MM in the week ending September 18^th.
  • A broader measure of claims including extended benefits, pandemic assistance and other programs fell sharply from 11.3MM to 5.0MM in the week ended September 11^th as the federal enhanced unemployment ended.
  • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf .
• The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf .  Also, the EIA reported in the prior week:
  • Field production of crude oil rose from 10.6MMBPD to 11.1MMBPD.
  • Natural gas storage rose 88BN cubic feet and is below the 5 year average at this time of year.
• Baker Hughes reported the number of active oil rigs rose 7 to 428.  The number of active natural gas rigs was unchanged at 99.

Please call us if you have any questions.

Loren C. Rex, CFP®, MA                                                            Erik A Smith AIF®

President                                                                                  Managing Partner

Generations Financial Planning & Wealth Management        269-441-4143

77 E. Michigan Ave, Suite 140

Battle Creek, MI  49017

Tel 269-441-4090

Carrie Fuce, Assistant 269-441-4091

Toll Free: 800-513-8180

Fax 866-381-2301

Visit our Website:  www.genfinplan.com <http://www.genfinplan.com>  

Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.  The Indices mentioned are unmanaged and cannot be invested into directly.