Major stock indices ended the week mixed with modest gains in the Nasdaq 100 and Dow 30 Industrials and the biggest drop in the Russell 2000 small cap index. The market moves each day were driven by earnings announcements and by changes in the outlook for FED rate cuts.
On Wednesday, the Federal Reserve chose to cut its benchmark interest rate by 0.25% to a range of 3.75% to 4.00%. The decision was made with two dissents, one preferring to cut rates further and one wanting to leave rates unchanged. Fed Chair Powell in comments after the meeting said, “A further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it”. This greatly reduced the likelihood that the FED will cut at its next meeting in December.
The Bank of Canada cut its benchmark rate to 2.25%. The European Central Bank met and chose to leave its benchmark interest rate at 2.00%.
Treasury bond yields rose with the 30-year bond yield at 4.665% and the 10-Year note at 4.095%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.17%. Crude oil fell to $60.92 a barrel and natural gas soared to $4.349 per MMBTUs. The U.S. dollar rose to 99.78 and gold fell to $4010.40 an ounce.
In economic reports this week:
- The S&P Cotality (formerly known as CoreLogic) Case-Shiller Home Price Index fell 0.3% in August and was up 1.51% from a year earlier.
- The EIA weekly oil report is here: Weekly Petroleum Status Report. Also, the EIA reported in the prior week:
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- Field production of crude oil rose from 13.629MM BPD to 13.644MM BPD.
- Natural gas storage rose 74BN cubic feet and was above its average level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs fell 6 to 414 and the number of natural gas rigs rose 4 to 125.
- Factset reported with 64% of S&P 500 companies reporting that the blended earnings increase was 10.7%.
Please call us if you have any questions.
Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
Nicholas Acri, CFP® – Partner & Wealth Advisor
Dylan Thomas, CFP® – Partner & Wealth Advisor
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. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
https://bakerhughesrigcount.gcs-web.com/na-rig-count
https://www.census.gov/economic-indicators
