Stocks built on previous week's gains helped by strong corporate earnings and positive economic news. There was evidence that supply pressures and inflation might be peaking as September Core CPI (ex food and energy) came in at 4%, inline with estimates.
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Markets recovered last week, regaining a portion of quarter-end losses. Energy stocks led gains as natural gas prices hit record highs in Europe and major oil exporters voted not to increase production, sending oil prices to a seven-year high.
U.S. markets closed out the third quarter in the green, with the S&P 500 eeking out its sixth consecutive quarter of positive performance.
The major U.S. indices overcame an early week sell-off to end the week flat to higher. Monday's S&P 500 biggest daily drop since May 12 was due to multiple factors. First off, there were fears that China's second-biggest property developer and the world's most heavily in debt, Evergrande, might default. This set off concerns about a global financial contagion similar to the Lehman Brothers collapse in September of 2008.
The S&P 500 notched its second straight week of losses in a September slump. Investors are processing mixed signals these days, with encouraging economic data being weighed against supply chain constraints, elevated valuations, and the prospect of Fed tapering.
The major stock indices traded down last week, in a shortened week post the Labor Day holiday. The week's religious holiday also contributed to subdued trading volumes.
Markets rallied to new highs this week heading into the Labor Day weekend. On Friday, the August jobs report showed a slowdown in employment gains, as nonfarm payrolls grew by 235k versus expectations for 750k. July's gains were revised higher however and the unemployment rate fell to a pandemic low of 5.2%. A jump in hourly earnings also reignited inflation fears.
Stocks gained last week, helped by FDA approval of the Pfizer-BioNTech Covid 19 vaccine. However, that good news was offset on Thursday by an attack at the Kabul Airport in Afghanistan amid the U.S. military exit, resulting in casualties.
Stocks pulled back for the week, but not before the S&P 500 reached a new record high of 4480 on Monday. Small caps and energy shares were losers for the week. There are plenty of negatives weighing on market sentiment including evidence of a slowdown in China, weaker than expected retail sales, and mixed housing data. Adding to concerns are the delta variant and the rise of the Taliban in Afghanistan after a hasty U.S. withdrawal.
Markets gained ground last week, shrugging off the resurgence of COVID-19 and its economic implications. Value stocks outpaced growth peers, with materials leading on a sector basis. On the flip side, energy sold off, and info tech names lagged driven by weaker pricing in semis.