Tag: corporate revenues

The Markets (as of market close November 19, 2021)

Stocks closed last week mixed, with the Nasdaq and the S&P 500 posting gains, while the Russell 2000, the Global Dow, and the Dow fell. Another round of strong corporate earnings data was enough to overcome investor concerns that rising inflation might accelerate the withdrawal of economic stimulus, while a resurgence of COVID-19 cases in Europe could lead to more lockdowns, stalling economic recovery. Ten-year Treasury yields ended the week where they began. Crude oil prices declined more than 2.5% to $78.76 per barrel. The dollar rose, while gold prices dipped lower. Consumer discretionary led the market sectors, advancing 3.8%, while information technology rose 2.4%. Energy fell 5.2%.

Stocks closed marginally lower to begin the week last Monday. The Russell 2000 dipped 0.5%, while the remaining benchmark indexes listed here fell by less than 0.1%. Ten-year Treasury yields increased to close at 1.62%. The dollar and crude oil prices advanced slightly. The market sectors were also mixed, with energy and utilities showing strength, while information technology, health care, and materials lagged.

Last Tuesday, equities rose following strong economic data. The majority of the benchmark indexes listed here posted solid gains after strong retail sales figures, a solid industrial production report, and favorable corporate earnings results. Only the Global Dow dipped lower, while the Nasdaq (0.8%), the S&P 500 (0.4%), the Russell 2000 (0.2%), and the Dow (0.2%) gained. Crude oil prices declined, while the dollar and 10-year Treasury yields climbed higher.

Last Tuesday’s momentum for stocks didn’t carry over to Wednesday, as each of the benchmark indexes ended the day in the red. The Russell 2000 led the decline, falling 1.2%, followed by the Dow (-0.6%), the Nasdaq (-0.3%), the S&P 500 (-0.3%), and the Global Dow (-0.3%). Along with rising inflation, housing starts slowed in October as builders wrestled with rising material prices and labor shortages. Ten-year Treasury yields and the dollar fell. Crude oil prices dipped below $80.00 per barrel, closing the day at around $78.00 per barrel. Consumer discretionary, real estate, and health care were the only sectors to advance. Energy (-1.7%) and financials (-1.1%) fell the furthest.

Consumer discretionary and information technology shares helped push the Nasdaq (0.5%) and the S&P 500 (0.3%) higher last Thursday. The Russell 2000 (-0.6%), the Global Dow (-0.4%), and the Dow (-0.2%) fell. Treasury yields and the dollar slid, while crude oil prices advanced marginally.

Wall Street was driven lower last Friday as economically sensitive market sectors, such as energy, financials, and health care, fell. Among the benchmark indexes listed here, only the Nasdaq was able to post a gain. The Russell 2000 and the Global Dow dipped 0.9%, while the Dow dropped 0.8%. The S&P 500 inched slightly lower by the close of trading. Ten-year Treasury yields and crude oil prices decreased, while the dollar advanced.

The national average retail price for regular gasoline was $3.399 per gallon on November 15, $0.011 per gallon less than the prior week’s price but $1.288 higher than a year ago. Gasoline production decreased during the week ended November 12, averaging 9.9 million barrels per day. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ended November 12 — 32,000 barrels per day more than the previous week’s average. Refineries operated at 87.9% of their operable capacity, up from the prior week’s level of 86.7%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/19	Weekly Change	YTD Change
DJIA	30,606.48	36,100.31	35,601.98	-1.38%	16.32%
Nasdaq	12,888.28	15,860.96	16,057.44	1.24%	24.59%
S&P 500	3,756.07	4,682.85	4,697.96	0.32%	25.08%
Russell 2000	1,974.86	2,411.78	2,363.59	-2.00%	19.68%
Global Dow	3,487.52	4,134.92	4,057.43	-1.87%	16.34%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.58%	1.58%	0 bps	67 bps
US Dollar-DXY	89.84	95.11	96.04	0.98%	6.90%
Crude Oil-CL=F	$48.52	$80.84	$78.76	-2.57%	62.32%
Gold-GC=F	$1,893.10	$1,868.00	$1,861.20	-0.36%	-1.69%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Retail sales continued to climb in October, increasing 1.7% after rising 0.8% (revised higher) in September. Retail sales have advanced 16.3% since October 2020. Retail trade sales rose 1.9% in October and are up 14.8% for the year. Gasoline station sales increased 3.9% in October and 46.8% from October 2020, while food services and drinking places were flat in October but have increased 29.3% from last year. This data seems to indicate that consumers are willing to spend, even at higher prices.
• Import prices rose 1.2% last month, the largest monthly increase since May 2021. Prices for imports have risen 10.7% since October 2020, the largest 12-month increase since the year ended in June 2021. Contributing to the import price increase was an 8.1% jump in petroleum prices. Natural gas prices advanced 19.7% in October. Overall, import fuel prices increased 86.7% over the past 12 months. Petroleum prices have risen 86.1% for the year, while natural gas prices have risen 134.0%. Export prices advanced 1.5% in October, the largest one-month increase since May 2021. Export prices have increased 18.0% over the 12 months ended in October. Agricultural export prices (1.0%) and nonagricultural prices (1.5%) increased in October.
• Industrial production rose 1.6% in October after falling 1.3% in September. Much of the October increase was reflective of the recovery from the effects of Hurricane Ida. Manufacturing output rose 1.2% last month, while factory output moved up 0.6%. Overall, total industrial production in October was 5.1% above its year-earlier level and the highest since December 2019.
• The number of building permits for new residential construction rose by 4.0% in October. Building permits for single-family construction increased 2.7%. Overall, the number of building permits issued for residential construction is 3.4% above the October 2020 rate. Housing starts dipped 0.7% last month, while single-family housing starts slid 3.9%. Housing completions were essentially unchanged in October from the previous month but are 8.4% below the October 2020 pace. Single-family home completions fell 1.7% in October.
• For the week ended November 13, there were 268,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 6 was 1.5%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended November 6 was 2,080,000, a decrease of 129,000 from the prior week’s level, which was revised up by 49,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 732,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.4%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 30 were the District of Columbia (3.5%), Puerto Rico (3.5%), California (3.0%), Alaska (2.5%), Hawaii (2.5%), Illinois (2.5%), New Jersey (2.4%), Nevada (2.2%), the Virgin Islands (2.2%), and Oregon (1.9%). The largest increases in initial claims for the week ended November 6 were in Kentucky (+6,716), Ohio (+3,846), Tennessee (+2,411), Illinois (+1,893), and Michigan (+1,564), while the largest decreases were in California (-4,222), the District of Columbia (-1,794), and Louisiana (-1,028).

Eye on the Week Ahead

Thanksgiving week is filled with important economic reports, led by the second estimate of the third-quarter GDP. The initial estimate showed the economy expanded at a rate of 2.0%, well off the pace of 6.7% set in the second quarter. The report on personal income and outlays for October is also out this week. Although personal income fell 0.1% in September, consumer spending increased 0.6%, and consumer prices rose 0.3%. Finally, the housing sector is front and center with the latest data on sales of new and existing homes. Sales of both new and existing homes soared in September, increasing 14.0% and 7.0%, respectively.

The Markets (as of market close November 12, 2021)

Although equities closed last week on a high note, it wasn’t enough to recover from mid-week losses. Each of the benchmark indexes lost ground, with the Russell 2000 falling over 1.0% to lead the pack. Inflation concerns seemed to weigh on investors’ minds during the week. While the Federal Reserve continues to suggest that inflationary pressures will calm by next year, traders may be concerned that if prices continue to rise, the Fed may consider hiking interest rates as soon as the summer of 2022. Ten-year Treasury yields edged higher. The dollar advanced, while crude oil prices fell to $80.84 per barrel. Gold prices rose for the second consecutive week, jumping nearly 2.7%. Materials led the market sectors, climbing 2.5% for the week. Consumer discretionary (-3.2%), energy (-1.7%), and utilities (-1.0%) fell the furthest.

Several of the benchmark indexes listed here reached new highs last Monday. The Dow finished up 0.3%, the S&P 500 and the Nasdaq eked out 0.1% gains, while the Russell 2000 advanced 0.2%. These advances drove each of these indexes to record highs. Among the market sectors, materials and energy led the winners, while utilities, consumer discretionary, and consumer staples fell. Ten-year Treasury yields and crude oil prices climbed higher, while the dollar dipped lower.

Stocks retreated from their longest rally since 2017 last Tuesday, as the benchmark indexes dipped from their all time highs. Consumer discretionary, financials, information technology, and health care dragged the S&P 500 lower, falling 0.4% by the close of trading. The Dow declined 0.3%, the Nasdaq and the Russell 2000 each lost 0.6%, and the Global Dow slid 0.3%. The yield on 10-year Treasuries fell to 1.43% — its lowest end-of-day rate since mid-September. Crude oil prices rose nearly 3.0%, while the dollar was mixed.

Rising inflation data shook the markets last Wednesday. Ten-year Treasury yields rose by nearly 9.0%, while the Nasdaq and the Russell 2000 each fell by about 1.6%. The S&P 500 dipped 0.8%, the Dow slipped 0.7%, and the Global Dow fell 0.5%. The dollar climbed higher, while crude oil prices fell to $81.31 per barrel, down 3.4% from the previous day’s value. Gold prices gained 1.2%. Several of the market sectors declined, led by energy (-3.0%), followed by information technology (-1.7%) and communication services (-1.3%). Consumer staples, health care, and utilities were the only sectors to close the day in the black.

Last Thursday was Veterans Day, an unusual trading day in the United States. Stock markets are open, but bond markets are closed. Tech stocks led a comeback in the Nasdaq, pushing that index up 0.5% last Thursday. The Russell 2000 also recovered some of the previous day’s losses after advancing 0.8%. The large caps didn’t fare quite as well. The S&P 500 inched up 0.1%, while the Dow fell 0.4%. The Global Dow dipped 0.1%. Crude oil prices decreased for the second consecutive day, falling to $81.12 per barrel. The dollar rose 0.3%.

Last Friday saw stocks post solid gains. The Nasdaq added 1.0%, followed by the S&P 500 (0.7%), the Dow (0.5%), the Global Dow (0.2%), and the Russell 2000 (0.1%). Ten-year Treasury yields advanced, while crude oil prices and the dollar fell. The market sectors were mixed on the day, with communication services and information technology gaining more than 1.0%, while energy and utilities dipped lower.

The national average retail price for regular gasoline was $3.410 per gallon on November 8, $0.020 per gallon more than the prior week’s price and $1.314 higher than a year ago. Gasoline production decreased during the week ended November 5, averaging 10.1 million barrels per day. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ended November 5 — 343,000 barrels per day more than the previous week’s average. Refineries operated at 86.7% of their operable capacity, up from the prior week’s level of 86.3%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/12	Weekly Change	YTD Change
DJIA	30,606.48	36,327.95	36,100.31	-0.63%	17.95%
Nasdaq	12,888.28	15,971.59	15,860.96	-0.69%	23.06%
S&P 500	3,756.07	4,697.53	4,682.85	-0.31%	24.67%
Russell 2000	1,974.86	2,437.08	2,411.78	-1.04%	22.12%
Global Dow	3,487.52	4,154.51	4,134.92	-0.47%	18.56%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.45%	1.58%	13 bps	67 bps
US Dollar-DXY	89.84	94.22	95.11	0.94%	5.87%
Crude Oil-CL=F	$48.52	$81.40	$80.84	-0.69%	66.61%
Gold-GC=F	$1,893.10	$1,819.00	$1,868.00	2.69%	-1.33%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Inflation data for October was hotter than expected. The Consumer Price Index jumped 0.9% in October after increasing 0.4% the previous month. Over the last 12 months ended in October, consumer prices have risen 6.2% — the largest 12-month increase since November 1990. Consumer prices less food and energy rose 4.6% over the last 12 months, the largest 12-month increase since August 1991. The October CPI advance was broad-based, with increases in energy (4.8%), shelter (0.5%), food (0.9%), used cars and trucks (2.5%), and new vehicles (1.4%) among the larger contributors. Gasoline prices increased 6.1% and prices for fuel oil rose 12.3%.
• Prices that producers are charged for goods and services continued to climb higher in October. According to the latest report from the Bureau of Labor Statistics, producer prices rose 0.6% last month, after advancing 0.5% in September and 0.7% in August. Producer prices have risen 8.6% for the 12 months ended in October. Prices less foods, energy, and trade services moved up 0.4% in October after increasing 0.1% in September. For the 12 months ended in October, producer prices less foods, energy, and trade services rose 6.2%. Over 60% of the October increase in producer prices can be traced to a 1.2% rise in goods prices. Producer prices for services increased 0.2%. Driving the increase in goods prices was a 4.8% jump in energy prices. In particular, prices for gasoline rose 6.7% in October. A 0.4% increase in trade services accounted for nearly 75% of the increase in producer prices for services.
• The Treasury budget deficit for October, the first month of fiscal year 2022, was $165.1 billion. The deficit for the previous October was $284.1 billion, or 42%, greater. Government receipts totaled $283.9 billion, while expenditures were $449.0 billion. Compared to October 2020, individual income tax receipts rose 32.0%, while corporate tax receipts jumped 72.0%.
• According to the latest Job Openings and Labor Turnover Summary, there were 10.4 million job openings in September, a reduction of less than 200,000 from the previous month’s total. Job openings increased in health care and social assistance (+141,000); state and local government, excluding education (+114,000); wholesale trade (+51,000); and information (+51,000). Job openings decreased in state and local government education (-114,000); other services (-104,000); real estate and rental and leasing (-65,000); and educational services (-45,000). In September, hires and total separations were little changed at 6.5 million and 6.2 million, respectively.
• For the week ended November 6, there were 267,000 new claims for unemployment insurance, a decrease of 4,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 30 was 1.6%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 30 was 2,160,000, an increase of 59,000 from the prior week’s level, which was revised down by 4,000. For comparison, last year at this time, there were 728,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.6%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 23 were Puerto Rico (3.7%), California (2.8%), the District of Columbia (2.5%), New Jersey (2.5%), the Virgin Islands (2.5%), Alaska (2.4%), Hawaii (2.8%), Illinois (2.2%), Nevada (2.2%), and Oregon (1.9%). The largest increases in initial claims for the week ended October 30 were in Kentucky (+2,882), Louisiana (+907), Minnesota (+885), Tennessee (+798), and New Jersey (+768), while the largest decreases were in Missouri (-3,014), Florida (-2,286), Virginia (-1,482), Oklahoma (-1,324), and Pennsylvania (-1,026).

Eye on the Week Ahead

More inflation data for October is available this week with the release of the retail sales report and import and export prices. Also worth watching is the Federal Reserve’s report on industrial production. September saw industrial production slip 1.3%, with manufacturing output falling 0.7%. That followed August, which saw industrial production fall 0.1% (revised).

The Markets (as of market close November 5, 2021)

The first week of November saw stocks climb higher on the strength of favorable corporate earnings data, strong job growth, a dovish policy statement from the Federal Reserve, and favorable news on the battle against COVID-19. Several of the benchmark indexes listed here reached record highs. The Russell 2000 led the indexes for the week, followed by the Nasdaq, the S&P 500, the Global Dow, and the Dow. Ten-year Treasury yields dipped for the second consecutive week. The dollar inched higher, while crude oil prices fell. Several of the market sectors trended higher, led by consumer discretionary (5.0%), information technology (3.3%), and materials (3.2%).

Energy and consumer discretionary stocks helped drive the S&P 500 to another record high last Monday. Third-quarter corporate earnings data has continued to be strong, with results of more than 80% of the reporting companies in the S&P 500 exceeding estimates. Stocks have generally rallied since earnings season began a few weeks ago, despite ongoing and persistent supply-chain bottlenecks that have weighed on manufacturers. Also posting gains were the small caps of the Russell 2000 (2.7%), the Global Dow (1.0%), the Nasdaq (0.6%), and the Dow (0.3%). Treasury yields were flat, the dollar fell, and crude oil prices increased.

Last Tuesday, the Dow (0.4%) closed above 36,000 for the first time ever, while the S&P 500 (0.4%) and the Nasdaq (0.3%) also reached record highs. The Russell 2000 rose 0.2%, while the Global Dow dropped 0.2%. Ten-year Treasury yields fell to 1.54%. The dollar climbed higher, while crude oil prices declined. The best performing market sectors were materials, real estate, information technology, consumer staples, and health care.

Wall Street continued to trend higher last Wednesday after the Federal Reserve’s policy announcement matched expectations. The Russell 2000 gained 1.8%, followed by the Nasdaq (1.0%), the S&P 500 (0.7%), the Global Dow (0.4%), and the Dow (0.3%). With Wednesday’s gains, the S&P 500, the Dow, the Nasdaq, and the Russell 2000 each closed at record highs, a feat not seen since the beginning of 2018. The market sectors generally performed well, with only energy (-0.8%) and utilities (-0.3%) falling. Consumer discretionary (1.8%) and materials (1.1%) gained the most. Bond prices fell, pushing yields higher. The dollar and crude oil prices declined.

The Nasdaq and the S&P 500 rose to new all time highs last Thursday, while the Dow, the Russell 2000, and the Global Dow slipped lower. Ten-year Treasury yields fell to 1.52%. The dollar rose, while crude oil prices fell below $80.00 to $79.21 per barrel. The market sectors were mixed, with consumer discretionary and information technology advancing 1.5%, while financials and real estate dipped more than 1.0%.

Stocks closed last week on a high note, with the Dow, the Russell 2000, the Nasdaq, and the S&P 500 reaching record highs. Strong jobs data and encouraging news about the viability of an antiviral pill for COVID-19 helped equities extend recent gains. The Russell 2000 advanced nearly 1.5%, followed by the Dow (0.6%), the Global Dow (0.5%), the S&P 500 (0.4%), and the Nasdaq (0.2%). Health care was the only market sector to recede. Energy jumped 1.4% to lead the gainers. Treasury yields and the dollar slid, while crude oil prices climbed back above $80.00 per barrel, closing around $81.40.

The national average retail price for regular gasoline was $3.390 per gallon on November 1, $0.007 per gallon more than the prior week’s price and $1.278 higher than a year ago. Gasoline production increased during the week ended October 29, averaging 10.2 million barrels per day. U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ended October 29 — 25,000 barrels per day less than the previous week’s average. Refineries operated at 86.3% of their operable capacity, up from the prior week’s level of 85.1%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/5	Weekly Change	YTD Change
DJIA	30,606.48	35,819.56	36,327.95	1.42%	18.69%
Nasdaq	12,888.28	15,498.39	15,971.59	3.05%	23.92%
S&P 500	3,756.07	4,605.38	4,697.53	2.00%	25.07%
Russell 2000	1,974.86	2,297.19	2,437.08	6.09%	23.41%
Global Dow	3,487.52	4,091.61	4,154.51	1.54%	19.13%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.55%	1.45%	-10 bps	54 bps
US Dollar-DXY	89.84	94.12	94.22	0.11%	4.88%
Crude Oil-CL=F	$48.52	$83.27	$81.40	-2.25%	67.77%
Gold-GC=F	$1,893.10	$1,784.20	$1,819.00	1.95%	-3.91%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• October saw 531,000 new jobs added, the unemployment rate dipped 0.2 percentage point to 4.6%, and the number of unemployed dropped 255,000 to 7.4 million. The number of unemployed and the unemployment rate continue to trend downward, but they remain above their levels prior to the pandemic (3.5% and 5.7 million, respectively, in February 2020). Thus far this year, monthly job growth has averaged 582,000. Employment has increased by 18.2 million since April 2020 but is down by 4.2 million, or 2.8%, from its pre-pandemic level in February 2020. Notable job gains occurred in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing. Employment in public education declined over the month. The labor force participation rate in October, at 61.6%, was unchanged from the previous month. The employment-population ratio inched up 0.1 percentage point in October to 58.8%. Among the unemployed, 840,000 voluntarily left their jobs, up 52,000 from the September figure. Conversely, the number of persons not in the labor force who currently want a job was 6.0 million in October, essentially unchanged over the month but up by 968,000 since February 2020. In October, 11.6% of employed persons teleworked because of the pandemic, down from 13.2% in the prior month. In October, 3.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, down from 5.0 million in September. Average hourly earnings increased by $0.11 to $30.96 in October. Over the past 12 months, average hourly earnings have increased 4.9%. The average workweek decreased by 0.1 hour to 34.7 hours in October.
• There were no surprises following the Federal Open Market Committee’s meeting last week. The target range for the federal funds rate will remain at its present 0.00%-0.25%. However, in light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities, beginning later this month.
• Capacity constraints, transportation delays, rising material costs, and labor shortages continued to impact manufacturers in October, according to the latest survey of purchasing managers from IHS Markit. The IHS Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 58.4 in October, down from 60.7 in September. Although manufacturing increased (a reading of 50.0 and above signifies growth) in September, the PMI™ was the weakest in 10 months.
• While the manufacturing sector may be feeling the effects of supply bottlenecks, service providers enjoyed a strong October. The IHS Markit US Services PMI Business Activity Index registered 58.7 in October, up from 54.9 in September. Survey respondents noted a steep upturn in business activity in October, with the rise in output the quickest in three months. New business expanded, supported by a rise in new orders. Nonetheless, concerns regarding labor shortages and unstable supply chains led business confidence to drop to an eight-month low. The rate of cost inflation eased to an eight-month low, despite being quicker than any pace of increase since before March 2021. In response to a further rise in costs, firms raised their selling prices at the fastest rate on record.
• The September goods and services trade deficit was $80.9 billion, up $8.1 billion, or 11.2%, from the August deficit. Exports fell $6.4 billion, or 3.0%, while imports rose $1.7 billion, or 0.6%. Year to date, the goods and services deficit increased $158.7 billion, or 33.1%, from the same period in 2020. Exports increased $274.1 billion, or 17.4%. Imports increased $432.8 billion, or 21.1%.
• For the week ended October 30, there were 269,000 new claims for unemployment insurance, a decrease of 14,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 23 was 1.6%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 23 was 2,105,000, a decrease of 134,000 from the prior week’s level, which was revised down by 4,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 765,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.8%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 16 were Puerto Rico (4.2%), California (2.9%), Hawaii (2.8%), Illinois (2.8%), New Jersey (2.5%), the Virgin Islands (2.5%), Alaska (2.4%), the District of Columbia (2.3%), Nevada (2.3%), and Pennsylvania (2.0%). The largest increases in initial claims for the week ended October 23 were in the District of Columbia (+3,875), Kentucky (+2,940), Missouri (+2,048), Florida (+1,307), and Oklahoma (+1,256), while the largest decreases were in California (-13,138), Georgia (-4,107), Michigan (-2,505), Pennsylvania (-1,245), and Tennessee (-794).

Eye on the Week Ahead

Inflation data for October is available this week with the release of the Producer Price Index and the Consumer Price Index. Prices at the producer level have risen at a faster pace than consumer prices. The PPI jumped 0.5% in September and is up 8.6% over the past 12 months. The CPI advanced 0.4% in September and has risen 5.4% since last September.

The Markets (as of market close October 29, 2021)

October proved to be one of the best months for equities in 2021, with each of the benchmark indexes listed here enjoying solid gains. The S&P 500 had its best month since November 2020. The Nasdaq picked up over 7.25%, the largest monthly advance in more than a year. Strong third-quarter corporate earnings data helped ease investor concerns that rising inflation, supply-chain bottlenecks, labor shortages, and rising coronavirus cases would hamper corporate America. Year to date, each of the indexes is well over 16.00% higher than its respective 2020 closing value, with the S&P 500 and the Nasdaq more than 20.00% higher.

Wall Street’s strong October performance came despite a notable slowdown in economic growth as third-quarter GDP rose 2.0%, following a 6.7% increase in the second quarter. Job growth slowed, although the number of unemployment claims also decreased. Inflationary pressures appear to be more than transitory as the latest Consumer Price Index showed prices rose 0.4%, while producer prices increased 0.5%. The housing sector enjoyed solid gains as sales of both new and existing homes rose. Each of the market sectors advanced, with energy (16.9%) and consumer discretionary (9.3%) leading the way.

Ten-year Treasury yields inched higher in October, the dollar dipped lower, gold prices increased nearly 1.50%, and crude oil prices rose more than 10.00% to $83.27 per barrel. The national average retail price for regular gasoline was $3.383 per gallon on October 25, up from the September 27 price of $3.175 per gallon.

Stock Market Indexes

Market/Index	2020 Close	Prior Month	As of October 29	Monthly Change	YTD Change
DJIA	30,606.48	33,843.92	35,819.56	5.84%	17.03%
Nasdaq	12,888.28	14,448.58	15,498.39	7.27%	20.25%
S&P 500	3,756.07	4,307.54	4,605.38	6.91%	22.61%
Russell 2000	1,974.86	2,204.37	2,297.19	4.21%	16.32%
Global Dow	3,487.52	3,958.34	4,091.61	3.37%	17.32%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.52%	1.55%	3 bps	64 bps
US Dollar-DXY	89.84	94.25	94.12	-0.14%	4.76%
Crude Oil-CL=F	$48.52	$75.03	$83.27	10.98%	71.62%
Gold-GC=F	$1,893.10	$1,758.20	$1,784.20	1.48%	-5.75%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Latest Economic Reports

• Employment: The pace of job gains continued to slow in September, as 194,000 new jobs were added, well off the pace set in August (366,000) and July (1,091,000). Through the first nine months of the year, monthly job growth has averaged 561,000. The unemployment rate declined by 0.4 percentage point to 4.8% in September. The number of unemployed persons fell by 710,000 to 7.7 million. Both measures are down considerably from their highs at the end of the February-April 2020 period. However, they remain above their levels prior to the COVID-19 pandemic (3.5% and 5.7 million, respectively, in February 2020). In September, notable job gains occurred in leisure and hospitality (74,000), professional and business services (60,000), retail trade (56,000), transportation and warehousing (47,000), and in information technology (32,000). Employment decreased by 144,000 in local government education and by 17,000 in state government education. Among the unemployed, the number of permanent job losers declined by 236,000 to 2.3 million in September but is 953,000 higher than in February 2020. The number of persons not in the labor force who currently want a job was 6.0 million, down by roughly 300,000 from the August total. The labor force participation rate in September, at 61.6%, dipped 0.1 percentage point from the August rate and has remained within a narrow range of 61.4% to 61.7% since June 2020. The employment-population ratio was 58.7% in September, up 0.2 percentage point from the previous month. This measure is up from its low of 51.3% in April 2020 but remains below the figure of 61.1% in February 2020. In September, 13.2% of employed persons teleworked because of the pandemic, little changed from the prior month. In September, 5.0 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, which is down from 5.6 million in August. Average hourly earnings rose $0.19 to $30.85. Earnings have increased 4.6% since September 2020. The average work week in September was 34.8 hours, an increase of 0.2 hours from August.
• The number of claims for unemployment insurance fell in October. According to the latest weekly totals, as of October 16, there were 2,243,000 workers receiving unemployment insurance benefits, down from the September 18 total of 2,802,000. The unemployment rate for the week ended October 16 was 1.7%, down 0.3 percentage point from the September 18 rate of 2.0%. During the week ended October 9, Extended Benefits were available in four states/territories: Alaska, Connecticut, New Jersey, and New Mexico; 42 states reported 270,013 continued weekly claims for Pandemic Unemployment Assistance benefits (1,059,248 on September 11), and 45 states reported 244,379 continued claims for Pandemic Emergency Unemployment Compensation benefits (991,813 on September 11).
• FOMC/interest rates: The Federal Open Market Committee did not meet in October. The next scheduled meeting is November 2-3. Nevertheless, several members of the Committee, including Chair Jerome Powell, have indicated that The Federal Reserve is likely to begin scaling back its asset purchasing program as early as November. Also, Powell acknowledged that inflationary pressures may continue to increase for a longer period than previously anticipated, which could prompt an increase in the federal funds rate.
• GDP/budget: According to the first, or “advance” estimate from the Bureau of Economic Analysis, the economy accelerated at an annual rate of 2.0% in the third quarter after advancing 6.7% in the second quarter. Consumer spending, as measured by personal consumption expenditures, increased 1.6% in the third quarter after rising 12.0% in the prior quarter. The personal consumption price index (prices for consumer goods and services) rose 5.3% in the third quarter after climbing 6.5% in the second quarter. Excluding food and energy, the price index increased 4.5% in the third quarter compared with an increase of 6.1% in the second quarter. In the third quarter, fixed investment dipped 0.8% following a 3.3% increase in the second quarter, and residential fixed investment fell 7.7% after decreasing 11.7% in the second quarter. Exports slid 2.5% in the third quarter after increasing 7.6% in the second quarter. Imports (which are a negative in the calculation of GDP) increased 6.1% in the third quarter (7.1% in the second quarter).
• The Treasury budget deficit for September came in at $61.5 billion, 51.0% under the deficit in the same month last year. Following the latest increase, the budget deficit for fiscal year 2021, which ends in September, widened to $2.77 trillion, 11.0% smaller than the deficit for fiscal year 2020. Compared to fiscal year 2020, government expenditures rose by 4.0% in fiscal year 2021, however that increase was offset by an 18.0% increase in government receipts. Individual income taxes rose 27.1% in fiscal year 2021, while corporate income taxes increased 76.0%.
• Inflation/consumer spending: Prices at the consumer level continued to advance in September but at a slightly slower pace. According to the latest Personal Income and Outlays report, consumer prices rose 0.3% in September, the same increase as in August (revised). Prices have increased 4.4% since September 2020. Excluding food and energy, consumer prices rose 0.2% in September (0.3% in August) and 3.6% since September 2020. Personal income decreased 1.0% in September, while disposable (after-tax) personal income fell 1.3%. The decrease in personal income in September primarily reflected a decrease in government social benefits. Consumer spending rose 0.6% in September following a 1.0% increase in August.
• The Consumer Price Index climbed 0.4% in September following a 0.3% jump in August. Over the 12 months ended in September, the CPI rose 5.4%. Prices less food and energy rose 0.2% in September. Higher costs for food and fuel, as well as other items, such as new vehicles, have mainly contributed to the increase in the CPI. Food prices rose 0.9% in September, while energy prices increased 1.3% (fuel oil prices climbed 3.9%), and new vehicle prices advanced 1.3%. Shelter costs, which account for about one third of the CPI, gained 0.4% in September.
• Producer prices continued to climb in September. Prices that producers receive for goods and services increased 0.5% for the month after rising 0.7% in August and 1.0% in July. Producer prices increased 8.6% for the 12 months ended in September, the largest yearly gain since November 2010 when 12-month data was first calculated. In September, prices for services rose 0.2% (0.7% in August), and prices for goods moved up 1.3% (1.0% in August). Producer prices less foods, energy, and trade services advanced 0.1% in September (0.3% in August) and have risen 5.9% since September 2020. Energy prices jumped 2.8% in September, while prices for food rose 2.0%.
• Housing: Existing home sales rebounded from an August dip, advancing 7.0% in September. Nevertheless, over the past 12 months, existing home sales have dropped 2.3%. The median existing-home price was $352,800 in September ($356,700 in August), up 13.3% from September 2020 ($311,500). Total housing inventory at the end of September dropped 0.8% from August’s supply and is down 13.0% from one year ago. In September, unsold inventory sat at a 2.4-month supply at the present sales pace (2.6 month supply in August). Sales of existing single-family homes also rose in September, climbing 7.7% after decreasing 1.9% in August. Year over year, sales of existing single-family homes fell 3.1%. The median existing single-family home price was $359,700 in September, down from $363,800 in August.
• New single-family home sales increased in September, advancing 14.0% after falling 1.4% in August (revised). Despite the recent monthly increase, sales of new single-family homes have decreased 17.6% from September 2020. The median sales price of new single-family houses sold in September was $408,800 ($401,500 in August). The September average sales price was $451,700 ($446,900 in August). The inventory of new single-family homes for sale in September represents a supply of 5.7 months at the current sales pace, down from the August revised estimate of 6.5 months.
• Manufacturing: Industrial production fell 1.3% in September following a 0.1% dip in August (revised). Manufacturing output decreased 0.7% after declining 0.4% in August, as production of motor vehicles and parts fell 7.2% due to shortages of semiconductors. Factory output elsewhere declined 0.3%. Utilities dropped 3.6%, while mining production fell 2.3%. Much of the weakness in production in September resulted from large decreases in consumer goods and materials. Business equipment, defense and space equipment, and construction supplies recorded small gains, while business supplies recorded a small loss. Despite the recent downturns, total industrial production in September was 4.6% above its year-earlier level.
• New orders for durable goods decreased $1.0 billion, or 0.4%, in September after advancing 1.3% in August (revised). Transportation drove the September decline, falling $1.8 billion, or 2.3%. Excluding transportation, new orders rose 0.4% in September. Shipments (0.4%), unfilled orders (0.7%), and inventories (0.9%) advanced in September. New orders for nondefense capital goods decreased 4.2%, as nondefense aircraft and parts fell 27.9%. New orders for defense aircraft and parts increased 104.3% in September.
• Imports and exports: September import prices rose 0.4% following a 0.3% dip in August. Import prices rose 9.2% over the 12 months ended in September (8.9% for the 12 months ended in August). Import fuel prices fell 2.3% in August — the first monthly decrease since October 2020. The September monthly advance was largely driven by higher fuel prices, which rose 3.7%. Nonfuel import prices were flat on the month after falling 0.1% in August. Import fuel prices advanced 68.7% for the year ended in September. Export prices edged up 0.1% in September after increasing 0.4% in August. For the year ended in September, the price index for exports rose 16.3%. Export prices have not recorded a monthly decline since a 3.5% dip in April 2020.
• The international trade in goods advance report showed the deficit deepened by $8.1 billion, or 9.2%, to $96.3 billion. In September, exports decreased $7.0 billion, or 4.7%, while imports rose $1.1 billion, or 0.5%. For the 12 months ended in September, exports have risen 16.8%, while imports have increased 18.0%.
• The latest information on international trade in goods and services, out October 5, was for August and showed that the goods and services trade deficit increased by 4.2% to $73.3 billion. August exports rose 0.5%, while imports advanced 1.4%. Year over year, the goods and services deficit increased $140.8 billion, or 33.7%, from August 2020. Exports increased $244.3 billion, or 17.5%. Imports increased $385.1 billion, or 21.2%.
• International markets: Despite rising inflation in the eurozone, the European Central Bank is likely to maintain interest rates in negative territory for at least another year, diverging from other central banks including the Federal Reserve. Supply shortages, delivery bottlenecks, and labor constraints continue to drive producer prices and consumer prices higher. Consumer prices in October continued to climb in several countries including Italy (0.6%), France (0.4%), Germany (0.5%), and the United Kingdom (0.3%). China is still dealing with the economic impact of the pandemic. Unlike, the United States, which saw consumer spending rebound, China has seen consumer consumption stay subdued. In the market for October, the STOXX Europe 600 Index climbed 4.5%; the United Kingdom’s FTSE increased 2.8%; Japan’s Nikkei 225 Index rose 0.4%; and China’s Shanghai Composite Index dipped 0.6%.
• Consumer confidence: According to the latest report from The Conference Board, consumer confidence increased in October, following declines in the previous three months. The Consumer Confidence Index® stands at 113.8, up from 109.8 in September. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, rose to 147.4 in October from 144.3 the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, registered 91.3 in October, up from 86.7 in September. According to the report, consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased.

Eye on the Month Ahead

Job growth has slowed somewhat, while inflation has continued to rise. The Federal Reserve has hinted that it will begin scaling back asset purchases as early as November. With inflationary pressures mounting, it is possible that an upward adjustment to the federal funds rate may occur sooner rather than later. In addition, there may be follow-up items from the G-20 meeting held on October 30 in Rome. Items on the agenda included high energy prices, supply chain problems, and a global minimum tax rate. In addition, Congress is likely to continue working to reach a deal on a $1.75 trillion economic and environmental bill in November.

The Markets (as of market close October 29, 2021)

Solid corporate earnings data last week supported a strong week for equities. Investors’ fears that rising inflation, supply-chain snarls, labor shortages, and a surge in COVID-19 cases would hinder corporate earnings have yet to materialize. The Nasdaq led the benchmark indexes, followed by the S&P 500, the Dow, and the Russell 2000. The Global Dow dipped lower. Ten-year Treasury yields, gold, and crude oil prices fell, while the dollar advanced. Among the market sectors, consumer discretionary, communication services, and information technology increased the most, while energy, financials, industrials, and utilities decreased.

Wall Street opened the last week of October in fine fashion, as investors anticipated another spate of positive corporate earnings data. The Dow gained 0.2% and the S&P 500 rose 0.5%, each index closing at a record high. The big gainers were the Nasdaq and the Russell 2000, which added 0.9%. The Global Dow climbed 0.3%. Consumer discretionary, energy, and materials led the market sectors. Crude oil prices and 10-year Treasury yields dipped, while the dollar inched higher.

Last Tuesday proved to be another strong day for equities, with only the Russell 2000 failing to post a gain among the benchmark indexes listed here. The Dow was up 0.4%, and the S&P 500 rose 0.2% to eke out new record highs. The Nasdaq finished up 0.1% and the Global Dow advanced 0.3%. Crude oil and the dollar closed higher, while 10-year Treasuries fell for the fourth consecutive trading day. Most of the market sectors advanced, led by energy, utilities, and health care. Communication services and industrials declined.

The Dow and the S&P 500 fell last Wednesday after setting new records the previous day. The Russell 2000 and the Global Dow also drifted lower, while the Nasdaq was flat. Communication services and consumer discretionary were the only market sectors to advance by the close of trading. Energy fell 2.9% and financials dipped 1.7%. Ten-year Treasury yields closed below 1.60% for the first time in two weeks. Crude oil prices and the dollar also retreated.

Stocks rebounded last Thursday on another round of strong corporate earnings data. Real estate, industrials, and consumer discretionary helped drive the S&P 500 up 1.0% to a new record high. The Dow also recovered from Wednesday’s losses, gaining 0.7%, while the Nasdaq jumped 1.4% to reach a record high. Prices on 10-year Treasuries fell pushing yields higher. Crude oil prices rose to $83.13 per barrel. The dollar dipped nearly 0.5% against a basket of currencies.

Equities closed last week mixed, with the Dow, the S&P 500, and the Nasdaq posting gains, while the Russell 2000 and the Global Dow dipped lower. Ten-year Treasury yields fell on rising inflation and the prospect of interest-rate hikes. Crude oil prices and the dollar advanced. Communication services, health care, and information technology led the market sectors. Real estate, energy, utilities, and materials lost ground.

The national average retail price for regular gasoline was $3.383 per gallon on October 25, $0.061 per gallon more than the prior week’s price and $1.240 higher than a year ago. Gasoline production increased during the week ended October 22, averaging 10.1 million barrels per day. U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ended October 22 — 58,000 barrels per day more than the previous week’s average. Refineries operated at 85.1% of their operable capacity, up from the prior week’s level of 84.7%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 10/29	Weekly Change	YTD Change
DJIA	30,606.48	35,677.02	35,819.56	0.40%	17.03%
Nasdaq	12,888.28	15,090.20	15,498.39	2.71%	20.25%
S&P 500	3,756.07	4,544.90	4,605.38	1.33%	22.61%
Russell 2000	1,974.86	2,291.27	2,297.19	0.26%	16.32%
Global Dow	3,487.52	4,101.96	4,091.61	-0.25%	17.32%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.65%	1.55%	-10 bps	64 bps
US Dollar-DXY	89.84	93.62	94.12	0.53%	4.76%
Crude Oil-CL=F	$48.52	$84.20	$83.27	-1.10%	71.62%
Gold-GC=F	$1,893.10	$1,794.50	$1,784.20	-0.57%	-5.75%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The initial or “advance” estimate of third-quarter gross domestic product showed that economic growth slowed more than expected, as rising cases of the Delta variant led to new restrictions and delays in business reopenings. Gross domestic product increased at an annual rate of 2.0% in the third quarter. In the second quarter, GDP increased 6.7%. Consumer spending, as measured by personal consumption expenditures, increased 1.6% compared with an increase of 12.0% in the second quarter, likely reflective of decreasing government assistance. Consumer spending on services rose 7.9% in the third quarter, while durable goods expenditures contracted 26.2%. Fixed investment dipped 0.8%, driven lower by a 7.7% drop in residential fixed investment. Exports decreased 2.55%, while imports (a negative in the calculation of GDP) rose 6.1%. The personal savings rate fell from 10.5% in the second quarter to 8.9% in the third quarter. Disposable (after-tax) personal income decreased 0.7% compared to a 25.7% drop in the second quarter. The personal consumption expenditures price index, a measure of inflation, increased 5.3% in the third quarter, compared with an increase of 6.5% in the second quarter.
• Personal income (-1.0%) and disposable personal income (-1.3%) fell in September, reflective of a decrease in government social benefit payments in response to the pandemic. Wages and salaries rose 0.8% and personal income receipts on assets increased 0.2%. The drop in personal income didn’t greatly impact consumer spending, which advanced 0.6% in September. Consumer prices for goods and services increased 0.3% in September, the same increase as in August. For the 12 months ended in September, consumer prices have risen 4.4%. Excluding food and energy, consumer prices are up 3.6% since September 2020.
• Sales of new single-family homes surged in September, climbing 14.0% above the August rate. Despite the September increase, new home sales are 17.6% below the September 2020 estimate. The median sales price of new houses sold in September 2021 was $408,800. The average sales price was $451,700. The estimate of new houses for sale at the end of September was 379,000, which represents a supply of 5.7 months at the current sales pace.
• New orders for long-lasting, durable goods slipped in September, falling 0.4% following four consecutive monthly increases. Excluding transportation, new orders increased 0.4%. Excluding defense, new orders decreased 2.0%. Transportation equipment, down two of the last three months, drove the decrease, dropping $1.8 billion, or 2.3%. Several categories saw new orders fall in September including computers and electronic products (-0.3%), electrical equipment, appliances, and components (-0.5%), motor vehicles and parts (-2.9%), and nondefense aircraft and parts (-27.9%). New orders for defense aircraft and parts increased 104.3% in September. New orders for capital goods (used in the production of other consumer goods) dipped 0.4%, pulled lower by a 4.2% drop in nondefense capital goods. New orders for defense capital goods rose 28.4%.
• The advance report on international trade in goods for September showed the deficit increased $8.1 billion, or 9.2%, to $96.3 billion. Exports of goods for September were $142.2 billion, $7.0 billion, or 4.7%, less than August exports. Imports of goods for September were $238.4 billion, $1.1 billion, or 0.5%, more than August imports.
• For the week ended October 23, there were 281,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level, which was revised up by 1,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 16 was 1.7%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 16 was 2,243,000, a decrease of 237,000 from the prior week’s level, which was revised down by 1,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 768,000 initial claims for unemployment insurance, and the rate for unemployment claims was 5.3%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 9 were the District of Columbia (7.4%), Puerto Rico (3.7%), California (3.2%), Georgia (2.7%), Illinois (2.7%), Hawaii (2.6%), New Jersey (2.5%), Nevada (2.4%), the Virgin Islands (2.4%), and Alaska (2.3%). The largest increases in initial claims for the week ended October 16 were in California (+9,748), Tennessee (+1,688), Florida (+1,266), Georgia (+1,088), and Illinois (+512), while the largest decreases were in Virginia (-7,380), Michigan (-4,083), Pennsylvania (-4,033), Kentucky (-2,753), and Ohio (-2,287).

Eye on the Week Ahead

The latest employment figures for October are available at the end of this week. September saw 194,000 new jobs added, although the unemployment rate continued to fall, settling at 4.8%. The Markit purchasing managers surveys for manufacturing and services are also out this week. Survey respondents have noted that supply bottlenecks and labor shortages have hindered overall production.

The Markets (as of market close October 22, 2021)

Each of the benchmark indexes listed here advanced last week, led by the S&P 500, which rose 1.6%. Corporate earnings data for the third quarter has gotten off to a solid start to help push stocks higher. However, investors are paying close attention to elevated inflation, driven higher by global supply-chain constraints and labor shortages. According to Chair Jerome Powell, the Federal Reserve is closely monitoring price pressures, which may last longer than previously expected, increasing the possibility that the Fed may raise interest rates sooner than anticipated. Treasury yields and crude oil prices rose last week, while the dollar slid. Gold prices climbed higher but remain well below their 2020 year-end values. The market sectors closed last week generally higher, with only communication services lagging. Real estate (3.2%), health care (2.9%), and financials (2.8%) led the advancing sectors.

Stocks opened last Monday mixed, with megacaps and growth stocks outperforming value shares and cyclicals. The Nasdaq gained 0.8%, followed by the S&P 500 (0.3%) and the Russell 2000 (0.1%). The Dow (-0.1%) and the Global Dow (-0.2%) dipped. Crude oil prices slid, while Treasury yields and the dollar advanced. The market sectors were mixed, with consumer discretionary, information technology, and communication services advancing, while utilities, energy, and industrials slipped.

More solid corporate earnings data helped drive stocks higher last Tuesday. The Nasdaq and the S&P 500 each advanced 0.7%, while the Dow gained 0.6%. The Global Dow added 0.5% and the Russell 2000 increased 0.3%. Ten-year Treasury yields increased 322 basis points to close at 1.63%. Crude oil prices rose to $82.87 per barrel. The dollar edged lower. Among the market sectors, only consumer discretionary failed to advance. Health care, energy, and utilities rose by more than 1.0%.

Another day of favorable corporate quarterly earnings data helped push the Dow and the S&P 500 higher last Wednesday. The Nasdaq slipped 0.1%. The Russell 2000 and the Global Dow also advanced. Treasury yields inched higher, the dollar dipped lower, while crude oil prices climbed to over $84.00 per barrel. Health care, real estate, and utilities each rose over 1.5% on a day that saw several of the market sectors advance.

Consumer discretionary shares helped push the S&P 500 up 0.3% to reach a record high last Thursday. The Nasdaq led the benchmarks after climbing 0.6%. The Russell 2000 also advanced 0.3%. The Global Dow dropped 0.6%, while the Dow was flat. Ten‐year Treasury yields and the dollar increased, while crude oil prices fell to $82.67 per barrel.

Stocks closed mixed last Friday, with the Dow edging up 0.2% to reach a record high. The Global Dow, the only other index to post a gain, inched up 0.1%. The Nasdaq fell 0.8%, the Russell 2000 dipped 0.2%, and the S&P 500 dropped 0.1%. Ten-year Treasury yields and the dollar slid, while crude oil prices rose. The market sectors also returned mixed results last Friday, with consumer staples, energy, financials, health care, industrials, real estate, and utilities advancing, while communication services, consumer discretionary, information technology, and materials fell.

The national average retail price for regular gasoline was $3.322 per gallon on October 18, $0.055 per gallon more than the prior week’s price and $1.172 higher than a year ago. Gasoline production increased during the week ended October 15, averaging 10.1 million barrels per day. U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ended October 15 — 71,000 barrels per day less than the previous week’s average. Refineries operated at 84.7% of their operable capacity, down from the prior week’s level of 86.7%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 10/22	Weekly Change	YTD Change
DJIA	30,606.48	35,294.76	35,677.02	1.08%	16.57%
Nasdaq	12,888.28	14,897.34	15,090.20	1.29%	17.08%
S&P 500	3,756.07	4,471.37	4,544.90	1.64%	21.00%
Russell 2000	1,974.86	2,265.65	2,291.27	1.13%	16.02%
Global Dow	3,487.52	4,089.46	4,101.96	0.31%	17.62%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.57%	1.65%	8 bps	74 bps
US Dollar-DXY	89.84	93.94	93.62	-0.34%	4.21%
Crude Oil-CL=F	$48.52	$82.25	$84.20	2.37%	73.54%
Gold-GC=F	$1,893.10	$1,768.80	$1,794.50	1.45%	-5.21%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Industrial production fell 1.3% in September following a 0.1% drop in August (revised). In September, manufacturing output decreased 0.7%, driven lower by a 7.2% decline in the production of motor vehicles and parts, as shortages of semiconductors continued to hobble operations. The output of utilities dropped 3.6%, as demand for cooling subsided after a warmer-than-usual August. Mining production fell 2.3%. Despite the decrease in September, total industrial production rose at an annual rate of 4.3% for the third quarter, its fifth consecutive quarter with a gain of at least 4%. Total industrial production in September was 4.6% above its year-earlier level.
• New home construction slowed in September. According to the latest report from the Census Bureau, the number of issued building permits for all housing types fell 7.7% last month. Permits for single-family homes dipped 0.9%. Housing starts dropped 1.6% last month, while single-family housing starts were virtually unchanged from August. Housing completions in September declined 4.6%. Housing completions of single-family homes were virtually unchanged.
• Existing-home sales rose 7.0% in September after seeing sales wane the previous month. Nevertheless, sales of existing homes are down 2.3% from September 2020. Total housing inventory in September fell 0.8% from August and is down 13.0% from September 2020. Unsold inventory sits at a 2.4-month supply at the present sales pace, down from the August pace of 2.6 months. The median existing-home price was $352,800 in September, down from the August price of $356,700. Single-family home sales rose 7.7% last month but are down 3.1% from a year ago. The median existing single-family home price was $359,700 in September, down from the August price of $363,800.
• The September Treasury statement of government receipts and outlays is the final one for fiscal year 2021. The government deficit was $61.5 billion in September, $109.1 billion lower than the August deficit and 51.0% less than the September 2020 deficit. In September, outlays totaled $521.1 billion (5.0% higher than September 2020), while receipts totaled $459.5 billion (23.0% over September 2020). The total government deficit for FY 2021 was $2.8 trillion — 11.0% smaller than the FY 2020 shortfall. For FY 2021, government expenditures rose by 4.0% ($6.8 trillion), which was more than offset by an 18.0% increase in receipts ($4.1 trillion). In fiscal year 2021, individual income tax receipts were 27.1% higher than FY 2020. Employment and general retirement receipts increased by 31.3%. Corporate income taxes rose by 76.0% over FY 2020.
• For the week ended October 16, there were 290,000 new claims for unemployment insurance, a decrease of 6,000 from the previous week’s level, which was revised up by 3,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 9 was 1.8%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 9 was 2,481,000, a decrease of 122,000 from the prior week’s level, which was revised up by 10,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 798,000 initial claims for unemployment insurance, and the rate for unemployment claims was 5.7%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 2 were Puerto Rico (4.3%), Illinois (3.5%), California (3.3%), the District of Columbia (3.0%), Hawaii (3.0%), New Jersey (2.7%), Nevada (2.6%), Alaska (2.4%), Pennsylvania (2.3%), and New York (2.2%). The largest increases in initial claims for the week ended October 9 were in Michigan (+3,673), Missouri (+2,566), Maryland (+2,337), New Mexico (+2,012), and Kentucky (+1,454), while the largest decreases were in Tennessee (-989), California (-851), Florida (-839), New Jersey (-464), and Alabama (-301).

Eye on the Week Ahead The initial estimate for the third-quarter gross domestic product is out this week. The economy advanced at an annualized rate of 6.7% in the second quarter. The latest data on durable goods orders is also available this week. New orders increased by 1.8% in August

The Markets (as of market close October 15, 2021)

Despite a shaky start, Wall Street enjoyed a strong week of gains. A favorable start to corporate earnings season helped lift equities higher. Each of the benchmark indexes listed here posted solid weekly gains, led by the Nasdaq and the S&P 500. The dollar and Treasury yields slipped, while crude oil prices rose 3.5% to $82.25 per barrel. Despite the generally positive week, investors will continue to keep an eye on economic data and rising prices. Higher oil, gas, and other commodity prices could raise concerns about inflationary pressures and how they could drag down corporate profit margins. Materials shortages, rising wages, and shipping bottlenecks have driven up costs for producers. Many have passed these costs on to consumers, leading to more persistent inflation. Initial earnings data comes from banks and financial institutions. The next few weeks will see earnings reports from the bulk of companies in most sectors and may reveal the impact that inflation and supply demands has had on earnings margins so far in the third quarter.

Monday was the Columbus Day and Indigenous Peoples’ Day public holidays but stock markets were open and bond markets were closed. The Dow and the S&P 500 fell 0.7%, while the Nasdaq and the Russell 2000 dipped 0.6% on what was a fairly slow trading day. Crude oil prices rose 1.5% to reach $80.51 per barrel, a multi-year high. Investors may be waiting for the next round of corporate earnings data to weigh the potential impact of rising energy prices, labor costs, and supply-chain bottlenecks.

Stocks fell again last Tuesday. Only the small caps of the Russell 2000 ended the day in the black, gaining 0.6%. The Global Dow (-0.4%), the Dow (-0.3%), the S&P 500 (-0.2%), and the Nasdaq (-0.1%) declined. Ten-year Treasury yields dipped below 1.6%, closing the day at 1.58%. Crude oil prices were little changed, while the dollar advanced 0.2%. Consumer discretionary, real estate, and utilities led the market sectors, while communication services, information technology, and health care declined by at least 0.5%.

Equities rose for the first time in four sessions last Wednesday. With inflationary pressures continuing to run hot (see Consumer Price Index information below), technology shares increased, as investors seemed to focus on companies better able to pass on higher costs to consumers. The Nasdaq led the surge, climbing 0.7%, followed by the Russell 2000 and the S&P 500, which climbed 0.3%. The Dow and the Global Dow broke even on the day. Treasury yields, crude oil prices, and the dollar declined. Among the market sectors, utilities (1.1%) and information technology (0.6%) advanced, while financials dipped 0.6%.

Stocks rallied last Thursday, buoyed by strong bank earnings reports and encouraging unemployment data. Each of the benchmark indexes listed here gained at least 1.0%, led by the Nasdaq and the S&P 500, which added 1.7%. The Dow gained 1.6%, the Russell 2000 climbed 1.4%, and the Global Dow advanced 1.1%. The dollar and Treasury yields eased for the second consecutive day, while crude oil prices rose to $81.53 per barrel. Materials and information technology gained 2.4% and 2.3%, respectively, to lead the market sectors.

The market advanced for the third consecutive day last Friday. Strong earnings data and stronger-than-expected retail sales provided encouragement for investors. The Dow advanced 1.1%, followed by the Global Dow (0.9%), the S&P 500 (0.8%), and the Nasdaq (0.5%). The small caps of the Russell 2000 slipped 0.4%. Ten-year Treasury yields climbed 3.8%, crude oil prices rose 1.2%, while the dollar was little changed. The market sectors closed Friday generally higher, with consumer discretionary (1.8%) and financials (1.5%) leading the pack.

The national average retail price for regular gasoline was $3.267 per gallon on October 11, $0.077 per gallon more than the prior week’s price and $1.100 higher than a year ago. Gasoline production increased during the week ended October 8, averaging 9.6 million barrels per day. U.S. crude oil refinery inputs averaged 15.1 million barrels per day during the week ended October 8 — 700,000 barrels per day less than the previous week’s average. Refineries operated at 86.7% of their operable capacity, down from the prior week’s level of 89.6%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 10/15	Weekly Change	YTD Change
DJIA	30,606.48	34,746.25	35,294.76	1.58%	15.32%
Nasdaq	12,888.28	14,579.54	14,897.34	2.18%	15.59%
S&P 500	3,756.07	4,391.34	4,471.37	1.82%	19.04%
Russell 2000	1,974.86	2,233.09	2,265.65	1.46%	14.72%
Global Dow	3,487.52	4,026.66	4,089.46	1.56%	17.26%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.60%	1.57%	-3 bps	66 bps
US Dollar-DXY	89.84	94.10	93.94	-0.17%	4.56%
Crude Oil-CL=F	$48.52	$79.48	$82.25	3.49%	69.52%
Gold-GC=F	$1,893.10	$1,756.80	$1,768.80	0.68%	-6.57%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Consumer prices continued to escalate in September. According to the latest report from the Bureau of Labor Statistics, the Consumer Price Index increased 0.4% last month after advancing 0.3% in August. Over the last 12 months ended in September, consumer prices have risen 5.4%. The price index less food and energy rose 0.2% in September and 4.0% over the last 12 months. In September, several price indexes increased, including the index for food (0.9%), food at home (1.2%), energy (1.3%), fuel oil (3.9%), new vehicles (1.3%), and shelter (0.4%). Price indexes that decreased include apparel (-1.1%), used cars and trucks (-0.7%), and transportation services (-0.5%). Since September 2020, the price index for energy has risen 24.8%, with gasoline prices advancing 42.1% and fuel oil prices up 42.6%.
• Producer prices advanced 0.5% in September after climbing 0.7% the previous month. Producer prices have risen 8.6% over the past 12 months ended in September, the largest 12-month increase in the history of the index, which began November 2010. A 1.3% increase in goods accounted for nearly 80% of the overall price increase. Driving goods prices higher was a 2.8% jump in prices for energy (gasoline prices rose 3.9%). Producer prices for services moved up 0.2% in September, led by a 0.9% increase in trade services (a measure of the margins received by wholesalers and retailers).
• Retail sales increased 0.7% in September following a 0.9% jump in August. Retail sales have risen 13.9% since September 2020. Excluding motor vehicle and gasoline sales, retail sales advanced 0.7%, an indication that total consumer spending was strong in September.
• Import prices climbed 0.4% in September after declining 0.3% the prior month. The September rise in imports was the largest one-month increase since a 1.1% advance in June. In September, the advance was led by higher fuel import prices (3.7%). Since September 2020, import prices have risen 9.2%. Export prices ticked up 0.1% following a 0.4% increase in August. Export prices haven’t declined since April 2020 and are up 16.3% over the past 12 months.
• The number of job openings decreased by 659,000 in August to 10.4 million. The rate of job openings also declined 0.4 percentage point to 6.6%. In August, there were 6.8 million hires, a decrease of 439,000 from July’s total. The number of separations in August, at 6.0 million, rose by 209,000. Within separations, the number of quits increased in August to 4.3 million (+242,000), and the quits rate increased to a series high of 2.9%. Over the 12 months ended in August, hires totaled 72.6 million and separations totaled 66.7 million, yielding a net employment gain of 5.9 million.
• For the week ended October 9, there were 293,000 new claims for unemployment insurance, a decrease of 36,000 from the previous week’s level, which was revised up by 3,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 2 was 1.9%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 2 was 2,593,000, a decrease of 134,000 from the prior week’s level, which was revised up by 13,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 833,000 initial claims for unemployment insurance, and the rate for unemployment claims was 6.3%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended September 25 were Illinois (4.4%), Puerto Rico (4.3%), California (3.3%), Hawaii (2.9%), the Virgin Islands (2.8%), New Jersey (2.7%), the District of Columbia (2.6%), Nevada (2.6%), Alaska (2.5%), and Pennsylvania (2.5%). The largest increase in initial claims for the week ended October 2 was in Pennsylvania (+1,707), while the largest decreases were in California (-14,733), the District of Columbia (-3,905), Michigan (-3,370), Missouri (-2,598), and Texas (-2,376).

Eye on the Week Ahead

The Federal Reserve’s report on industrial production for September is available this week. The industrial sector has been advancing, despite supply-chain bottlenecks and labor shortages, which have led to increased costs. Data from the housing sector is also out this week, with reports on housing starts and existing home sales. Housing starts rose nearly 4.0% in August, although sales of existing homes fell more than 2.0%.

The Markets (as of market close October 8, 2021)

Stocks closed last week generally higher, despite a weak jobs report. A Congressional deal to extend the debt ceiling until early December helped drive stocks higher during the middle of the week. A poor showing last Friday was not enough to prevent the benchmark indexes from closing the week mostly in the black. The Dow enjoyed its biggest weekly gain since June. The S&P 500 advanced, while the Global Dow ended the week up over 1.3%. The Nasdaq eked out a gain, but the Russell 2000 dipped nearly 0.4%. Among the market sectors, energy jumped 5.0%, financials rose 2.3%, industrials climbed 1.8%, utilities increased 1.5%, and consumer staples advanced 1.4%. The yield on 10-year Treasuries gained 14 basis points to close the week at the highest level since June 4. Crude oil prices continued to rise, closing in on $80.00 per barrel. The dollar rose marginally, while gold prices declined.

Wall Street did not get off to a strong start last Monday. The Dow fell over 320 points and the Nasdaq lost more than 2.0%. A sell-off in shares of tech/growth stocks including a major social-media company, led equities lower last Monday. With Monday’s downturn, the Nasdaq has declined about 7.0% since its September 7 peak as it inches closer to -10.0% correction territory. A jump in energy and utility shares wasn’t enough to keep the S&P 500 from dipping 1.3%. The Russell 2000 lost 1.1% and the Global Dow slid 0.3%. Treasury yields and crude oil prices rose, while the dollar slipped.

Tech shares recovered from Monday’s decline to help drive the market higher last Tuesday. The Nasdaq jumped 1.3% to lead the benchmark indexes. The S&P 500 gained 1.1%, the Dow climbed 0.9%, the Global Dow gained 0.8%, and the Russell 2000 added 0.5%. The yield on 10-year Treasuries rose to 1.52%. Crude oil prices gained nearly 2.0% to reach $79.14 per barrel. The dollar advanced nearly 0.25%. Financials, communication services, and information technology increased at least 1.5% to lead the market sectors.

Wall Street ended last Wednesday generally higher on news that Congress was making progress toward a debt ceiling resolution. The Nasdaq (0.5%), the S&P 500 (0.4%), and the Dow (0.3%) rose, while the Russell 2000 (-0.6%) and the Global Dow (-0.3%) fell. Ten-year Treasury yields dipped, but remained over 1.52%. The dollar advanced, while crude oil prices declined. Energy, materials, and health care were the only market sectors to fall. Consumer staples and real estate advanced 1.0%.

Stocks posted a third straight day of gains last Thursday following the deal to push back the expiration of the debt ceiling to December 3. A larger-than-expected decline in new claims for unemployment insurance also helped bolster investor confidence. Consumer discretionary, health care, and materials led the market sectors. Each of the benchmark indexes listed here gained ground, led by the Russell 2000 (1.6%), followed by the Nasdaq (1.1%), the Dow (1.0%), the Global Dow (0.9%), and the S&P 500 (0.8%). Treasury yields reached 1.57%. The dollar dipped, while crude oil prices climbed nearly 2.0% to $78.85 per barrel.

Equities fell on weak jobs data last Friday. The Russell 2000 (-0.8%) and the Nasdaq (-0.5%) headed the declines. Only the Global Dow ended the day in the black. Energy and financials were the only market sectors to end the day higher. Ten-year Treasury yields continued to climb, closing last Friday at 1.60%. The dollar fell for the second consecutive day, while crude oil prices rose for the second consecutive day.

The national average retail price for regular gasoline was $3.190 per gallon on October 4, $0.015 per gallon more than the prior week’s price and $1.018 higher than a year ago. Gasoline production decreased during the week ended October 1, averaging 9.4 million barrels per day. U.S. crude oil refinery inputs averaged 15.7 million barrels per day during the week ended October 1 — 330,000 barrels per day more than the previous week’s average. Refineries operated at 89.6% of their operable capacity, up from the prior week’s level of 88.1%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 10/8	Weekly Change	YTD Change
DJIA	30,606.48	34,326.46	34,746.25	1.22%	13.53%
Nasdaq	12,888.28	14,566.70	14,579.54	0.09%	13.12%
S&P 500	3,756.07	4,357.04	4,391.34	0.79%	16.91%
Russell 2000	1,974.86	2,241.63	2,233.09	-0.38%	13.08%
Global Dow	3,487.52	3,973.93	4,026.66	1.33%	15.46%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.46%	1.60%	14 bps	69 bps
US Dollar-DXY	89.84	94.04	94.10	0.06%	4.74%
Crude Oil-CL=F	$48.52	$75.76	$79.48	4.91%	63.81%
Gold-GC=F	$1,893.10	$1,760.10	$1,756.80	-0.19%	-7.20%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Employment rose by 194,000 in September, well short of expectations. There were some encouraging signs, however. The unemployment rate fell by 0.4 percentage point to 4.8%, down from 7.8% in September 2020. The number of unemployed persons decreased by 710,000 to 7.7 million (12.5 million in September 2020). Despite these improving figures, they remain above their levels prior to the COVID-19 pandemic (3.5% and 5.7 million, respectively, in February 2020). Employment is down 5.0 million, or 3.3%, from its pre-pandemic level in February 2020. The labor force participation rate dipped 0.1 percentage point to 61.6%, while the employment-population ratio inched up 0.2 percentage point to 58.7%. The number of persons not in the labor force who currently want a job was 6.0 million in September. These individuals were not counted as unemployed because they were not actively looking for work during the last four weeks or were unavailable to take a job. In September, 13.2% of employed persons teleworked because of the pandemic, while 5.0 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic. Average hourly earnings rose by $0.19 to $30.85 in September. Average hourly earnings have risen 4.6% since September 2020. The average work week increased 0.2 hour to 34.8 hours.
• According to the latest report from IHS Markit, the purchasing managers’ services index expanded in September, but at the slowest pace in the last 13 months. Labor shortages hindered output growth, while sales were negatively impacted by the spread of COVID-19. Meanwhile, cost pressures rose for the second consecutive month as input prices increased at a steep rate. Companies continued to pass on higher costs to clients, but at the slowest pace in the last five months.
• The goods and services trade deficit expanded by 4.2% to $73.3 billion in August. Exports grew 0.5%, while imports increased 1.4%. Year to date, the goods and services deficit increased $140.8 billion, or 33.7%, from the same period in 2020. Exports increased $244.3 billion, or 17.5%. Imports increased $385.1 billion, or 21.2%. The trade deficit for goods (not including services) with China increased $3.1 billion to $28.1 billion in August. The deficit with Canada increased $1.4 billion to $5.1 billion, while the deficit with Mexico decreased $1.9 billion to $6.6 billion.
• The number of new claims for unemployment insurance benefits rose for the third consecutive week. For the week ended October 2, there were 326,000 new claims for unemployment insurance, a decrease of 38,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 25 was 2.0%, a decrease of 0.1 percentage point from the previous week’s rate, which was revised up by 0.1 percentage point. The advance number of those receiving unemployment insurance benefits during the week ended September 25 was 2,714,000, a decrease of 97,000 from the prior week’s level, which was revised up by 9,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 782,000 initial claims for unemployment insurance, and the rate for unemployment claims was 7.2%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended September 18 were Puerto Rico (4.5%), Illinois (4.2%), California (3.1%), Hawaii (3.0%), New Jersey (2.9%), Nevada (2.8%), Alaska (2.7%), Oregon (2.7%), Louisiana (2.5%), and New York (2.5%). States and territories with the largest increases in initial claims for the week ended September 25 were California (+9,907), Michigan (+6,115), Texas (+4,625), the District of Columbia (+2,223), and Minnesota (+2,002), while the largest decreases were in Virginia (-7,245), Maryland (-5,617), Arizona (-4,241), Louisiana (-3,160), and Ohio (-2,853).

Eye on the Week Ahead

The latest reports on inflationary trends are available this week. Transitory or not, inflation has been rising for the past several months. The Consumer Price Index has risen 5.3%, the Producer Price Index is up 8.3%, import prices have increased 9.0%, and export prices have climbed 16.8%.

The Markets (as of market close October 1, 2021)

A rally last Friday helped drive stocks generally higher last week. The Dow, the Russell 2000, and the Global Dow were able to post gains, while the Nasdaq and the S&P 500 closed the week in the red. Declines in the market sectors were broad-based, with only energy (5.8%) climbing higher. Growth shares fared worse than value stocks, as evidenced by the dip in the tech-heavy Nasdaq. While the federal government averted a partial shutdown, no progress was made on raising the federal debt limit. Investors also saw the prospects of inflationary pressures continuing as supply constraints are driving production costs higher. Ten-year Treasury yields rose 13 basis points to 1.46%. Some analysts suggest that a spike in Treasury yields may be reflective of investors’ expectations that the Federal Reserve could start tightening its monetary policies as early as November. Crude oil prices increased more than $5.00 per barrel. The dollar continued its bullish run, while gold prices dipped.

Stocks opened the week mixed, with the Dow, the Russell 2000, and the Global Dow gaining, while the Nasdaq and the S&P 500 lost value. The dollar and crude oil prices advanced. Bond prices slid, increasing the yield on 10-year Treasuries to 1.48%. Rising bond yields could weigh on growth stocks, particularly in the technology sector, which generally has low dividend yields. Energy and financials led the market sectors, while health care, information technology, utilities, and real estate dipped.

Stocks tumbled last Tuesday on growing concern over the debt-ceiling impasse in Washington. Technology shares underperformed, pulling the Nasdaq down 2.8% — its largest single-day decline since March. The Russell 2000 fell 2.3%, followed by the S&P 500 (-2.0%), the Dow (-1.6%), and the Global Dow (-1.1%). Ten-year Treasury yields reached 1.53%, a mark not approached since late June. The dollar rose for the second consecutive day, while crude oil prices fell. The market sectors declined, with information technology (-3.0%) and communication services (-2.8%) falling the furthest. Energy (0.5%) was the only sector to gain ground.

The market yielded mixed returns last Wednesday. Consumer staples, health care, utilities, and real estate helped push the large caps of the Dow (0.3%) and the S&P 500 (0.2%) higher, while a pullback in tech shares dragged the Nasdaq (-0.2%) lower. The Russell 2000 (-0.3%) and the Global Dow (-0.2%) also fell. Ten-year Treasury yields pushed higher, while the dollar climbed to its highest level since November 2020. Crude oil prices receded but remained well over $74.00 per barrel.

Equities dipped lower last Thursday, despite confirmation that Congress passed a nine-week spending bill to temporarily avert a U.S. government shutdown. Each of the indexes listed here closed in the red, led by the Dow (-1.6%), followed by the S&P 500 (-1.2%), the Russell 2000 (-0.9%), the Global Dow (-0.9%), and the Nasdaq (-0.4%). The dollar and 10-year Treasury yields fell, while crude oil prices rose. All of the market sectors declined, with industrials (-2.1%) and consumer staples (-1.9%) falling the furthest, while financials, materials, and real estate each fell 1.6%.

Stocks had their best day of the week last Friday, with dip-buying driving cyclicals higher. Investors got promising news about a new COVID-19 medication. Each of the indexes posted gains, led by the Russell 2000 (1.7%), followed by the Dow (1.4%), the S&P 500 (1.2%), the Nasdaq (0.8%), and the Global Dow (0.4%). Bond prices rose, pulling the yields on 10-year Treasuries lower. The dollar slid, while crude oil prices advanced. Energy (3.3%), communication services (1.8%), financials (1.6%), information technology (1.4%), and industrials (1.4%) led the market sectors.

The national average retail price for regular gasoline was $3.175 per gallon on September 27, $0.009 per gallon less than the prior week’s price but $1.006 higher than a year ago. Gasoline production increased during the week ended September 24, averaging 9.9 million barrels per day. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ended September 24 — 67,000 barrels per day more than the previous week’s average. Refineries operated at 88.1% of their operable capacity, up from the prior week’s level of 87.5%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 10/1	Weekly Change	YTD Change
DJIA	30,606.48	34,258.32	34,326.46	0.20%	12.15%
Nasdaq	12,888.28	15,047.70	14,566.70	-3.20%	13.02%
S&P 500	3,756.07	4,395.64	4,357.04	-0.88%	16.00%
Russell 2000	1,974.86	2,218.56	2,241.63	1.04%	13.51%
Global Dow	3,487.52	3,961.73	3,973.93	0.31%	13.95%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.33%	1.46%	13 bps	55 bps
US Dollar-DXY	89.84	93.27	94.04	0.83%	4.67%
Crude Oil-CL=F	$48.52	$70.51	$75.76	7.45%	56.14%
Gold-GC=F	$1,893.10	$1,768.40	$1,760.10	-0.47%	-7.03%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The economy accelerated at an annualized rate of 6.7% in the second quarter, according to the third and final estimate from the Bureau of Economic Analysis. GDP increased 6.3% in the first quarter. Contributing to the increase in GDP were upward revisions in personal consumption expenditures (12.0%) and exports (7.6%), which were partially offset by an upward revision to imports, which are a subtraction in the calculation of GDP. The increase in second-quarter GDP reflected continued economic recovery, reopening of establishments, and an ongoing government response related to the COVID-19 pandemic. In the second quarter, government assistance payments in the form of loans to businesses and grants to state and local governments increased, while social benefits to households, such as the direct economic impact payments, declined. The personal consumption price index, a measure of inflation, increased 6.5% in the second quarter. Excluding food and energy prices, the price index advanced 6.1%.
• According to the latest report from the Bureau of Economic Analysis, personal income inched up 0.2% in August after rising 1.1% in July. The small August increase in personal income was likely impacted by a 3.7% decline in unemployment insurance benefits. Wages and salaries gained 0.5% (1.1% in July). Disposable (after-tax) income rose 0.1% in August after increasing 1.1% the prior month. Consumer spending increased 0.8% in August after dipping 0.1% in July. Prices for goods and services continued to rise in August, increasing 0.4%, the same advance as in July. Excluding food and energy, consumer prices rose 0.3% (0.3% in July). For the year ended in August, consumer prices have increased 4.3%.
• New orders for durable goods increased 1.8% in August. This increase, up 15 of the last 16 months, followed a 0.5% rise in July. Transportation equipment, up three of the last four months, led the increase, climbing 5.5% in August. Excluding transportation, however, new orders edged up just 0.2%. Unfilled orders and inventories increased, while shipments decreased 0.5% following three consecutive monthly increases. New orders for motor vehicles and parts dipped 3.1% in August after advancing 5.3% in July. Orders for nondefense aircraft and parts jumped 77.9% in August after falling 36.3% the previous month. New orders for capital goods rose 6.7%, driven higher by a 9.0% increase in orders for nondefense capital goods. Defense capital goods fell 8.3%.
• The advance report on international trade in goods revealed the trade deficit expanded by 0.9% in August. Exports of goods increased by 0.7%, while imports of goods grew by 0.8%. Since August 2020, exports have increased 25.6% and imports have climbed 17.8%.
• According to the latest report from IHS Markit, the purchasing managers’ index dropped to a five-month low in September, as production was hampered by material and labor shortages. The IHS Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 60.7 in September, down from 61.1 in August. While a reading above 50 indicates expansion, the rate of growth is slowing. As a result of supply-chain bottlenecks, backlogs of work have risen at the fastest pace on record. Prices continue to rise as the rate of input cost inflation, which softened only slightly from August’s series record, caused firms to raise their charges at an unprecedented pace.
• The number of new claims for unemployment insurance benefits rose for the third consecutive week. For the week ended September 25, there were 362,000 new claims for unemployment insurance, an increase of 11,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 18 was 2.0%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 18 was 2,802,000, a decrease of 18,000 from the prior week’s level, which was revised down by 25,000. For comparison, last year at this time, there were 803,000 initial claims for unemployment insurance, and the rate for unemployment claims was 7.8%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended September 11 were Puerto Rico (4.7%), California (3.4%), the District of Columbia (3.2%), Oregon (3.2%), Alaska (3.1%), Nevada (3.1%), New Jersey (3.1%), the Virgin Islands (3.1%), Hawaii (2.7%), and Illinois (2.7%). States and territories with the largest increases in initial claims for the week ended September 18 were California (+17,218), Virginia (+12,140), Ohio (+4,147), Oregon (+3,413), and Maryland (+2,452), while the largest decreases were in Louisiana (-6,935), New York (-2,275), Missouri (-1,568), Oklahoma (-1,264), and New Mexico (-1,055).

Eye on the Week Ahead

Employment figures for September are available at the end of this week. While the jobs sector has been steadily improving, the pace of new hires has slowed. Since June and July, when more than 900,000 new jobs were added each month, August saw a job increase of only 235,000. On the other hand, earnings have increased 4.3% since August 2020.

The Markets (third quarter through September 30, 2021)

Overall, the third quarter was a roller-coaster ride for the market. The Dow, the Russell 2000, the Nasdaq, and the Global Dow lost value, while the S&P 500 was able to eke out a quarterly gain. Treasury yields, the dollar, and crude oil prices ended the third quarter higher, while gold prices dipped lower. Financials, information technology, communication services, and health care ended the quarter in the black. Energy, industrials, and materials fell by at least 4.5%. Despite the downturns, the benchmark indexes remain well ahead of their 2020 closing values, led by the S&P 500, which ended the quarter nearly 15.0% over last year’s pace.

The yield on 10-year Treasuries fell 30 basis points. Crude oil prices increased $14.17 per barrel, or 24.0%, in the third quarter. The dollar lost nearly 1.0%, while gold prices advanced 3.6%. The national average retail price for regular gasoline was $3.175 per gallon on September 27, up from the August 30 price of $3.139 and higher than the June 28 price of $3.091.

July kicked off the third quarter with large caps outperforming small caps. The S&P 500, the Dow, and the Nasdaq advanced, reaching record highs along the way, while the small caps of the Russell 2000 fell over 3.5%. Treasury yields, the dollar, and crude oil prices also declined. Gold prices advanced. By the end of the month, over 80% of the S&P 500 companies that reported earnings exceeded expectations. COVID cases surged as the Delta variant spread across the country. Inflation figures continued to rise. The Consumer Price Index rose 0.9%, the Producer Price Index climbed 1.0%, both import and export prices advanced 1.0%, and retail sales increased 0.6%. The Federal Reserve noted that the economic recovery remained on track. Second-quarter gross domestic product advanced at an annualized rate of 6.5%, according to the initial estimate from the Bureau of Economic Analysis. Health care led the market sectors, followed by real estate, utilities, information technology, and communication services. Financials and energy lagged.

Equities continued their strong showing in August, recording several record highs during the month. Strong corporate earnings reports and improving economic conditions helped bolster investor confidence, despite the increasing prevalence of the Delta variant. Growth stocks outpaced value shares. Financials and communication services led the market sectors, while energy lagged. The Nasdaq paced the indexes, climbing 4.0%, followed by the S&P 500 (2.9%), the Russell 2000 (2.1%), the Global Dow (2.1%), and the Dow (1.2%). Ten-year Treasury yields jumped 7 basis points to close the month at 1.30%. The dollar rose by 0.6%, while crude oil prices fell 7.2% to $68.51 per barrel on the last business day of the month. Gold prices changed little, trading at $1,817.50 per ounce. The jobs sector improved, adding 943,000 new jobs. Wage gains were strong, while unemployment claims dipped.

Following a strong July and August, September saw the market struggle with volatility. Traders had other concerns to deal with, including slowing economic growth, elevated inflation, supply-chain disruptions, a global energy crunch, and China’s regulatory restrictions. In addition, investors are facing the prospects of the Federal Reserve beginning to wind down its stimulus measures. Each of the benchmark indexes lost value, with the Nasdaq falling more than 5.0% and the S&P 500 dipping 4.8%. Among the market sectors, energy climbed 8.5%, while the remaining sectors ended well in the red. Crude oil prices rose more than 9.0% to close the month over $75.00 per barrel. The dollar and 10-year Treasury yields advanced, while gold prices declined.

Stock Market Indexes

Market/Index	2020 Close	As of September 30	Monthly Change	Quarterly Change	YTD Change
DJIA	30,606.48	33,843.92	-4.29%	-1.91%	10.58%
Nasdaq	12,888.28	14,448.58	-5.31%	-0.38%	12.11%
S&P 500	3,756.07	4,307.54	-4.76%	0.23%	14.68%
Russell 2000	1,974.86	2,204.37	-3.05%	-4.60%	11.62%
Global Dow	3,487.52	3,958.34	-2.59%	-1.08%	13.50%
Fed. Funds	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps	0 bps
10-year Treasuries	0.91%	1.52%	22 bps	8 bps	61 bps
US Dollar-DXY	89.84	94.25	1.70%	2.07%	4.91%
Crude Oil-CL=F	$48.52	$75.03	9.52%	2.07%	54.64%
Gold-GC=F	$1,893.10	$1,758.20	-3.26%	-0.69%	-7.13%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Latest Economic Reports

• Employment: The pace of job gains slowed in August, as 235,000 new jobs were added, well off the pace set in July (943,000) and June (938,000). Through the first eight months of the year, monthly job growth has averaged 586,000. The unemployment rate declined by 0.2 percentage point to 5.2% in August. The number of unemployed persons edged down to 8.4 million, following a large (782,000) decrease in July. Both measures are down considerably from their highs at the end of the February-April 2020 period. However, they remain above their levels prior to the COVID-19 pandemic (3.5% and 5.7 million, respectively, in February 2020). In August, notable job gains occurred in professional and business services (74,000), transportation and warehousing (53,000), private education (40,000), and manufacturing (37,000). Employment in retail trade declined 29,000. Among the unemployed, the number of permanent job losers declined by 443,000 to 2.5 million in August but is 1.2 million higher than in February 2020. The number of persons on temporary layoff, at 1.3 million, was essentially unchanged in August. The number of persons not in the labor force who currently want a job declined by 835,000 in August to 5.7 million but remains higher than the level in February 2020 (5.0 million). The labor force participation rate in August, at 61.7%, was unchanged over the month and has remained within a narrow range of 61.4% to 61.7% since June 2020. The employment-population ratio, at 58.5%, was little changed in August. This measure is up from its low of 51.3% in April 2020 but remains below the figure of 61.1% in February 2020. In August, 13.4% of employed persons teleworked because of the pandemic, little changed from the prior month. In August, 5.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, which is up from 5.2 million in July. Average hourly earnings rose $0.17 to $30.73 ($0.11/$30.54 in July). Earnings have increased 4.3% since August 2020. The average work week in August was 34.7 hours, unchanged since June 2021.
• The number of claims for unemployment insurance fell in September. According to the latest weekly totals, as of September 18 there were 2,802,000 workers receiving unemployment insurance benefits, down from the August 14 total of 2,862,000. The unemployment rate for the week ended September 18 was 2.0%, down 0.1 percentage point from the August 14 rate of 2.1%. During the week ended September 11, Extended Benefits were available in 9 states/territories: Alaska, California, Connecticut, the District of Columbia, Illinois, Nevada, New Jersey, New Mexico, and Texas; 44 states reported 1,059,248 continued weekly claims for Pandemic Unemployment Assistance benefits, and 46 states reported 991,813 continued claims for Pandemic Emergency Unemployment Compensation benefits.
• FOMC/interest rates: The Federal Open Market Committee met in September. While noting that the economy has continued to recover, the ongoing spread of the coronavirus, particularly the Delta variant, may be slowing the pace of recovery. With the goals of maximum employment and inflation running at 2.0%, the Committee decided to maintain the current target range for the federal funds rate at 0.00%-0.25%. However, the FOMC indicated that it may begin scaling back its purchases of securities as early as this November.

• GDP/budget: According to the third and final estimate from the Bureau of Economic Analysis, the economy accelerated at an annual rate of 6.7% in the second quarter of 2021 after advancing 6.3% in the first quarter. Consumer spending, as measured by personal consumption expenditures, increased 12.0% in the second quarter after rising 11.4% in the prior quarter. The personal consumption price index (prices for consumer goods and services) rose 6.5% in the second quarter after climbing 3.8% in the first quarter. Excluding food and energy, the price index increased 6.1%. In the second quarter, fixed investment climbed 3.3% following a 13.0% increase in the first quarter, and residential fixed investment fell 11.7% after increasing 13.3% in the first quarter. Exports rose 7.6% in the second quarter after decreasing 2.9% in the first quarter. Imports (which are a negative in the calculation of GDP) increased 7.1% in the second quarter (9.3% in the first quarter).
• The Treasury budget deficit was $170.6 billion in August following the July deficit of $302.1 billion. Following the latest increase, the budget deficit through the first 11 months of the current fiscal year widened to $2.7 trillion, roughly 10.9% lower than last year’s deficit over the same period. Compared to last fiscal year, government expenditures have increased 4.0% to $6.3 trillion, while receipts have increased 18.0% to $3.6 trillion.

• Inflation/consumer spending: Prices at the consumer level continued to advance in August. According to the latest Personal Income and Outlays report, consumer prices rose 0.4% in August after edging up 0.4% in July. Prices have increased 4.3% since August 2020. Excluding food and energy, consumer prices rose 0.3% in August (0.3% in July) and 3.6% since August 2020. Personal income increased 0.2% in August, while disposable (after-tax) personal income increased 0.1%. Consumer spending rose 0.8% in August following a -0.1% dip in July.
• The Consumer Price Index climbed 0.3% in August following a 0.5% jump in July. Over the 12 months ended in August, the CPI rose 5.3%. Prices less food and energy rose 0.1% in August, the smallest increase since February 2021. Energy prices increased 2.0%, mainly due to a 2.8% rise in gasoline prices. Food prices increased 0.4% (0.7% in July), and new vehicle prices rose 1.2% (1.7% in July). Over the 12 months ended in August, energy prices have risen 25.0%, food prices have increased 3.7%, and prices for used cars and trucks have climbed 31.9%.

• Prices that producers receive for goods and services continued to climb in August, increasing 0.7% after rising 1.0% in both June and July. Producer prices increased 8.3% for the 12 months ended in August, the largest yearly gain since November 2010 when 12-month data was first calculated. In August, prices for services rose 0.7% (1.1% in July), and prices for goods moved up 1.0% (0.6% in July). Producer prices less foods, energy, and trade services advanced 0.3% in August (0.9% in July) and have risen 6.3% since August 2020, the largest 12-month increase since August 2014.

• Housing: Existing home sales fell 2.0% in August following two consecutive monthly gains. Over the past 12 months, existing home sales dropped 1.5%. The median existing-home price was $356,700 in August ($359,900 in July), up 14.9% from August 2020. Total housing inventory at the end of August dropped 1.5% from July’s supply and is down 13.4% from one year ago. In August, unsold inventory sat at a 2.6-month supply at the present sales pace, the same figure recorded in July but down from 3.0 months in August 2020. Sales of existing single-family homes also decreased in August, falling 1.9% after increasing 2.7% in July. Year over year, sales of existing single-family homes fell 2.8%. The median existing single-family home price was $363,800 in August, down from $367,000 in July.
• New single-family home sales increased for the second consecutive month in August, advancing 1.5% after climbing 1.0% in July. Despite the recent monthly increases, sales of new single-family homes have decreased 24.3% from August 2020. The median sales price of new single-family houses sold in August was $390,900 ($390,500 in July). The August average sales price was $443,200 ($446,000 in July). The inventory of new single-family homes for sale in August represents a supply of 6.2 months at the current sales pace, up slightly from the July revised estimate of 5.7 months.

• Manufacturing: Industrial production increased 0.4% in August after advancing 0.8% (revised) the previous month. Late-month shutdowns related to Hurricane Ida held down the gain in industrial production by an estimated 0.3 percentage point. Manufacturing output rose 0.2% in August after rising 1.6% in July. In August, mining fell 0.6%, reflecting hurricane-induced disruptions to oil and gas extraction in the Gulf of Mexico. The output of utilities increased 3.3%, as warm temperatures boosted demand for air conditioning. Total industrial production in August was 5.9% higher than its year-earlier level and 0.3% above its pre-pandemic (February 2020) level.
• New orders for durable goods increased 1.8% in August after advancing 0.5% in July (revised). Transportation drove the August increase, with new orders climbing 5.5% after decreasing 0.4% in July. Excluding transportation, new orders edged up 0.2%. Excluding defense, new orders advanced 2.4% after dipping 0.5% in July. New orders for nondefense aircraft and parts jumped 77.9% in August after falling 36.3% the previous month. Goods declined 8.0% following a 1.6% increase in July. New orders for capital goods reversed a 3.1% drop in July, increasing 6.7% in August. The advance was driven by a 9.0% rise in orders for nondefense capital goods. New orders for defense capital goods fell 8.3%.

• Imports and exports: August import prices decreased for the first time since October 2020. The import price index declined 0.3% in August following increases of 0.4% in July and 1.1% in June. Import prices rose 9.0% over the 12 months ended in August (10.1% for the 12 months ended in July). This is the smallest 12-month increase since March 2021. Import fuel prices fell 2.3% in August — the first monthly decrease since October 2020. The August downturn in fuel prices was mostly driven by a 2.4% decline in petroleum prices. Despite the decline in August, import fuel prices advanced 56.5% for the year ended in August. Nonfuel import prices dipped 0.1% in August after ticking up 0.1% in July. Export prices increased 0.4% in August after increases of 1.1% in July and 1.2% in June. For the year ended in August, the price index for exports rose 16.8%. Agricultural export prices rose 1.1% in August following a 1.7% decline in July. Nonagricultural exports rose 0.2% in August after increasing 1.4% in July.
• The international trade in goods deficit was $87.6 billion in August, up $0.8 billion, or 0.9%, from July. In August, exports increased $1.1 billion, or 0.7%, while imports rose $1.9 billion, or 0.8%. For the 12 months ended in August, exports have risen 25.6%, while imports have increased 17.8%.
• The latest information on international trade in goods and services, out September 2, was for July and showed that the goods and services trade deficit decreased by 4.3% to $70.1 billion. July exports rose 1.3%, while imports declined 0.2%. Year over year, the goods and services deficit increased $131.0 billion, or 37.1%, from July 2020. Exports increased $205.0 billion, or 16.8%. Imports increased $336.0 billion, or 21.3%.
• International markets: Whether it’s transitory or not remains to be seen, but several countries are experiencing accelerated inflation. Germany, Europe’s largest economy, saw inflation grow at a record pace in September, climbing 4.1% following a 3.4% jump in August. French inflation hit a near 10-year high of 2.7% in September. Like the case in many countries, surging energy prices are driving the inflation spike in France. Nevertheless, if inflation continues to climb, pressure will be on the European Central Bank to determine how to proceed with its asset purchases going forward. China, the world’s second largest economy, is attempting to contain the financial fallout from the default or bankruptcy of mega-developer Evergrande. Also last month, the People’s Bank of China, which has targeted bitcoin since 2013, declared that all crypto-related activities are illegal in China. For September, the STOXX Europe 600 Index fell about 3.8%; the United Kingdom’s FTSE declined 0.8%; Japan’s Nikkei 225 Index rose 3.5%; and China’s Shanghai Composite Index was essentially unchanged from August.
• Consumer confidence: According to the latest report from The Conference Board, consumer confidence declined in September for the third consecutive month. The Consumer Confidence Index® stands at 109.3, down from 115.2 in August. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell to 143.4 in September from 148.9 the previous month. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, registered 86.6 in September, down from 92.8 in August. According to the report, consumer confidence waned, as the spread of the Delta variant deepened concerns over the state of the economy and short-term growth prospects. Nevertheless, consumer confidence is still high by historical levels, while these declines in confidence suggest consumers have grown more cautious and are likely to curtail spending going forward.

Eye on the Month Ahead

Heading into the fourth quarter of 2021, several economic indicators have improved, while a few have waned. Real estate and manufacturing slowed from the pace set earlier in the year. GDP posted strong data for the second quarter, although some estimates suggest that the third quarter will not be quite as strong. On the jobs front, there were nearly 11 million jobs available but nearly 8.7 million unemployed actively looking for work, further widening the gap between job openings and hires.