EZBites~week ending October 20, 2023
DOW: -1.6% (YTD:-0.1%)
NASDAQ: -3.2% (YTD:+24.1%)
S&P: -2.4% (YTD:+10.0%)
Equities experienced a fairly broad retreat this week, mainly predicated on interest rate angst, combined with some risk aversion related to the Israel-Hamas war.
Treasuries continued to act in a volatile manner that resulted in the 10-yr note yield rising above 5.00% at its high this week for the first time since 2007, ultimately, finishing at 4.92%. The 2-yr note yield rose four basis points this week to 5.09%.
Volatility in the Treasury market was partially a reaction to Fed Chair Powell's Thursday speech at the Economic Club of New York, where his remarks seemingly corroborated the popular view that the jump in long-term rates has helped to tighten financial conditions, which would lead the Fed to now proceed cautiously. However, in answering a question, Powell acknowledged that evidence does not yet indicate that the Fed is too tight with its policy ?These conflicting implications caused the weeks bond volatility.
Economic data this week painted a mixed picture. Retail sales were stronger than expected and weekly initial jobless claims hit their lowest level since January. ?Meanwhile, existing home sales were the weakest since October 2010 and the Leading Indicators index was negative for the 18th consecutive month.
Earnings news was also mixed. A few of the positives were Netflix (NFLX) and Tesla (TSLA) along with??Dow components Travelers (TRV), Procter & Gamble (PG), and American Express (AXP).
Only two of the S&P 500 sectors logged a gain this week -- defensive sector Consumer Staples (+0.7%) and Energy (+0.7%, with gains due to Middle East instability). The biggest decliners were the Real Estate (-4.6%) and Consumer Discretionary (-4.4%) sectors.
NOVEMBER newsletters come on NEXT SUNDAY October 29, 2023