Friday, September 17, 2021
U.S. and International Equities
Major Markets Finish Lower Amid Delta and Earnings Growth Concerns
The major markets finished lower for a second straight week. Friday’s quadruple witching where individual stock options and futures, along with index options and futures all expire on the same day, Delta variant cases and thus earnings concerns all played a role in traders selling equities this week. Emerging markets, as represented by the MSCI EM Index, was the biggest detractor on the backs of increased Chinese regulations.
Energy Propels Through a Tough Week
Energy stocks, which have pulled back this summer, caught a bid this week as concerns mount over lower than expected worldwide supply. Concerns abound over China not having enough coal and natural gas despite the country’s attempt over the past year to stockpile energy as rivals in North Asia and Europe compete for a finite supply. Growth stocks outperformed value on downward revised GDP expectations.
Fixed Income and Commodities Recap
Bonds Finish Higher while Oil/Natural Gas Have a Positive Week
The bellwether Bloomberg Barclays Aggregate Bond Index finished higher for the third week in a row, even with better than expected economic reports this week, but the year-to-date returns are still negative. Moreover, the 10-year Treasury yield increased ahead of the Federal Reserve’s meeting next week. Credit, as represented by the Bloomberg Barclays Credit Index, was a top-performing bond index for the second week in a row. Both oil and natural gas finished solidly in the green in the midst of supply concerns.
Economic Weekly Roundup
Retail Sales Beat Expectations While CPI Moderated
The U.S. Bureau of Labor Statistics released August data for the Consumer Price Index (CPI) Tuesday showing that headline CPI climbed 0.3% month over month. Meanwhile, core CPI, which does not include food and energy prices, rose a modest 0.1% month over month. Both statistics came in lower than expected.
The U.S. Census Bureau released August retail sales on Thursday reporting that retail sales grew almost 1% month over month vs. expectations for a decline. In addition, while retail sales, not including auto sales and gas, came in even better than expected by increasing 2% month over month vs. the consensus estimate of unchanged.
Other highlights from this week’s economic calendar include:
- Unemployment claims were reported this week at just above economists’ expectations, however continuing claims came in below expectations and continue to show improvement.
The highlight of next week’s economic calendar is undoubtedly the Federal Reserve Open Market Committee meeting on Wednesday. In addition, the following economic data is slated to be released during the week ahead:
- Monday: September National Association of Home Builders’ housing market index
- Tuesday: August building permits and housing starts, Q2 Current Account
- Wednesday: August existing home sales
- Thursday: Weekly initial and continuing unemployment claims, August Leading Indicators, Markit September Purchasing Managers’ Index
- Friday: August new home sales
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