We saw the previous week (8/28-9/1) bring in some solid returns across the three major exchanges and the Small Cap markets as well. What we saw this week was the markets giving back what they made! Small Caps lost -3.63% while the S&P 500 lost -1.29%. The Dow down -0.75%. The NASDAQ lost -1.93%.
Although we had a shortened week due to the Labor Day holiday, we were expecting a continuation of the current rally, instead of follow-through we saw a lackluster performance. It is very important to see a follow-through, building on a previous rally which gives the expectation of a continued rally in the market.
Treasuries continue to climb with the 2-year closing Friday at 4.99%. The 5-year Treasuries stand at 4.40% and the 10-year at 4.26%. Still experiencing an Inverted Yield Curve.
Investors don’t seem to be overly concerned with the current market conditions. The Volatility Index stands at 13.84% indicating little worry. If, however, we see the S&P 500 drop (and close) to 4340, we will think of another strategy that will align with that figure.
The Labor market remains ‘tight’ due to the layoffs we’ve seen over the past several months. Actually, the soft amount of layoffs. New filings for unemployment fell 13,000 to 216,000. The market was looking for 234,000.
The Federal Reserve does not seem poised to raise interest rates this month (September).
That’s all we have for this week. Stay tuned because we should have more news later in the week.
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