Week of Sept 8, 2023 Weekly Recap & The Week Ahead
Tuesday, September 12th, 2023“I’m also a firm believer in predicting price direction, but not magnitude. I don’t set price targets. I get out when the market action tells me it’s time to get out, rather than based on any consideration of how far the price has gone. You have to be willing to take what the market gives you.”
1. Bank of Canada Expected to Keep Rates Unchanged on Weak GDP Data — expectations that the Bank of Canada would take a breather were reinforced last week after Statistics Canada reported the economy unexpectedly contracted in the second quarter—at an annual rate of 0.2%—on a pronounced slowdown in household spending, especially on items like cars and furniture, and a fifth straight quarterly drop in real-estate investment. The data also indicated the third quarter got off to a weak start, with gross domestic product expected to remain flat in July.
Here is a summary of how the major indexes performed last week:
The major U.S. stock indexes closed lower last week, with the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all posting weekly declines of around 1%. The declines were driven by a combination of factors, including concerns about rising inflation, the potential for more interest rate hikes from the Federal Reserve, and the ongoing war in Ukraine.
Dow Jones Industrial Average: 34,577, down 0.7%
S&P 500 Index: 4,457, down 1.3%
Nasdaq Composite: 13,762, down 1.9%
The MSCI EAFE, which tracks developed international stocks, also declined last week, closing at 2,077, down 1.3%.
The decline in the stock market last week was a continuation of the sell-off that began in late July. Investors are becoming increasingly concerned about the possibility of a recession, as the Federal Reserve raises interest rates in an effort to combat inflation. The war in Ukraine is also weighing on investor sentiment, as it is disrupting global supply chains and causing energy prices to rise.
The market is likely to remain volatile in the coming weeks, as investors continue to assess the risks to the economy. The release of the August CPI data on Wednesday will be a key event to watch, as it will provide an update on inflation. If inflation continues to rise, it could force the Federal Reserve to raise interest rates even more aggressively, which could further hurt the stock market.
The week ahead — Economic data from Econoday.com:
