Price Return Last Week
S&P 500 +0.6% S&P Mid Cap +0.5% Russell 2000 (0.1%)
MSCI EAFE +3.5% MSCI EM +6.2%
10 Yr US Treasury Rate – rose from 3.73% to 3.75%
Source: Refinitiv Eikon
Recent News
Core PCE – August: 0.1% (Reuters Poll est. 0.2%) July: 0.2%
Core inflation was reported slightly below estimates perhaps vindicating the Federal Reserve’s decision to lower interest rates two weeks ago. This new reading drops the annualized three-month core PCE rate to just 2.1%. The modest pricing growth reported strengthens the argument for an additional 50 basis point interest rate cut in November. At the end of the week, the market estimated a 54% chance of another 50 basis point reduction.
Source: Refinitiv Eikon, @jasonfurman
China Stimulus – Recent concerns from China’s central bank that the country would be unable to achieve it’s 5% economic growth target for the year prompted a massive stimulus package to support the economy. China plans to spend 2 trillion yuan ($284 billion) on subsidies for consumer goods, business equipment, and helping local governments reduce their debt loads. China also reduced the amount of reserves that banks must maintain, which will release an additional 1 trillion yuan ($143 billion) into the banking system while leaving the door open to additional cuts. As a result, Chinese stocks had their best week since 2008.
Source: Thomson Reuters
Japan Selects New Prime Minister – Former Defense Minister, Shigeru Ishiba, won the Liberal Democratic Party’s election to become the new ruling head of the party and likely prime minister. The yen strengthened on the news as Ishiba is considered slightly less supportive of low interest rates than his primary opponent.
Source: The Associated Press, CNBC.com
Government Shutdown Avoided – Congress passed a bill on Wednesday authorizing funding for federal agencies until December, avoiding the possibility of a government shutdown until after the election. The White House has said that President Biden is likely to sign the bill in the coming days.
Source: The Wall Street Journal
Worst Baseball Team Ever – The Chicago White Sox lost to the Detroit Tigers on Friday for their 121st loss of the season, setting a new record for most losses by any team in the modern MLB era. Over the course of the year, the team endured three losing streaks of 14 games or more, including a 21-loss streak that tied the American League record for most consecutive losses. However, Sox fans have some reason for optimism as their farm system is ranked as the 11th best in baseball.
Upcoming Events
9/30 – Fed Chair Jerome Powell Speech, Notable Earnings Report: Carnival
10/1 – US Manufacturing ISM, Vice Presidential Debate, Notable Earnings Reports: Nike
10/2 – ADP Jobs Report
10/3 – US Services ISM, Notable Earnings Report: Constellation Brands
10/4 – Jobs Report
Source: Refinitiv Eikon
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