Blog Post

Stocks end a Volatile week Modestly Higher

Most stock indices ended the rollercoaster of a week with modest gains.  The Dow Industrials had the largest gains and the Russell 2000 small cap index ended with slight losses.  The debt limit deadline weighed on the markets until a compromise was reached to extend the debt limit until early December to avoid a U.S. default.  The economic data points to slower growth.  Higher energy prices indicate inflation is likely to come down anytime soon.

Treasury yields were higher with the 30-year bond yield closing at 2.163% and the 10-Year note closing at 1.607%.  Crude oil rose to $79.50 a barrel and natural gas rose to $5.602 per MMBTUs.  The U.S. dollar index rose to 94.11 and gold fell to $1756.50 an ounce.

In the economic numbers:

*             The Institute for supply management released the remaining September purchasing managers indices.  Keep in mind that anything over 50 represents expansion and under 50 represents contraction.

                *             US services PMI fell from 55.1 in August to 54.9 in September.

                *             Japan services PMI rose from 42.9 in August to 47.8 in September.

                *             China manufacturing PMI rose from 49.2 in August to 50.0 in September.

                *             China services PMI rose from 46.7 in August to 53.34 in September.

                *             Eurozone services PMI fell from 59.0 in August to 56.2 in September.

*             The Commerce Department reported the trade gap in goods and services expanded to $73.3 billion in August from $70.3 billion in July as the increase in imports outpaced the growth in exports.  The August deficit was slightly larger than the prior record of $73.2 billion in June. 

                *             Imports rose 1.4% in August to $287 billion, also a record high, reflecting higher shipments of consumer goods, as well as industrial supplies by business customers.

*             The Labor Department reported: 

                *             A net of 194,000 jobs were added in September, down from a revised 366,000 in August.  This was the smallest gain since December 2020.  There are about 5MM fewer people working than before the pandemic.  The industry lagging the most is leisure and hospitality.  The Delta variant surge was attributed to the slower jobs gain.

                *             The unemployment rate fell from 5.2% in August to 4.8% in September as fewer people were looking for employment. 

                *             A seasonally adjusted 326,000 workers filed initial claims for unemployment in the week ending October 2nd, down 38,000 from a revised 364,000 the week before.  This was the first decline in 4 weeks.  

                *             The 4-week moving average of claims, designed to smooth out volatility, rose to 344,000.

                *             Continuing claims fell from 2.8MM to 2.7MM in the week ending September 25th.

                *             A broader measure of claims including extended benefits, pandemic assistance and other programs fell from 5.0MM to 4.2MM in the week ended September 18th.

                *             For the full unemployment report go here: .

*             The EIA weekly oil report is here: .  Also, the EIA reported in the prior week:

                *             Field production of crude oil rose from 11.1MM barrels per day to 11.3MM BPD.

                *             Natural gas storage rose 118BN cubic feet and is below the 5 year average at this time of year.

*             Baker Hughes reported the number of active oil rigs rose 5 to 433.  The number of active natural gas rigs was unchanged at 99.

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Thank you,

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

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