Weekly Market Review September 13, 2023

While segments of the U.S. economy are showing signs of stress, such as the real estate market, on the whole the economy continues to defy gravity. Case-in-point, the ISM Services Index jumped to 54.5% last week (any value over 50% indicates expansion), delivering the eighth straight month of gains in the service sector and crushing economist's expectations of 52.5%. The U.S. consumer continues to spend on services despite high interest rates, growing debt levels, and depleted savings. (Source: MarketWatch)

The Treasury yield curve has been inverted since July 2022. Historically, yield curve inversions have coincided with eight of the past ten recessions, yet the heavily anticipated 2023 recession has yet to arrive. Since July of this year, when the spread on 2-year and 10-year Treasuries reached a level not seen since 1981 (-1.08%), the yield curve has been steepening. This is welcome news, as stronger-than-expected economic growth data has driven longer-term yields higher. However, the yield curve remains inverted as 2-year Treasuries are yielding 4.98% while 10-year Treasuries offered 4.26% as of Friday's close. (Source: The Wall Street Journal)

This week, all eyes will be on inflation as August Consumer Price Index data is released on Wednesday and Producer Price Index, a measure of wholesale inflation, is released on Thursday.  August retail sales are also released on Thursday, a widely watched gauge of consumer sentiment and spending habits.

 Blueprint Numbers

DON'T SAY RECESSION - FactSet, a research company, conducted an analysis of conference call transcripts from the most recent quarterly earnings season and discovered that only 62 out of the companies listed in the S&P 500 made reference to the term "recession." This figure marks a notable decrease from the 113 mentions in the preceding quarter's earnings calls and a substantial drop from 238 mentions a year ago. (Source: Factset)

NO CREDIT FOR BIDEN - Despite the recent optimistic economic data, including the Atlanta Fed's GDPNow model forecasting third quarter GDP at a whopping 5.6% annual growth grate, 58% of American's believe Biden's economic policies have made economic conditions worse. (Source: CNN)

GAS, HOUSING HANG OVER ECONOMY - Persistently high gas prices and unaffordable housing may be to blame for Biden's unfavorable polling on the economy. U.S. crude oil rose to $87/barrel last week, the highest level since last November. On the real estate front, median home prices have risen from $313,000 in 2019 to $416,100 today, while mortgage rates are over 7%. (Source: The Wall Street Journal)

RECORD SETTING CONTRACT - Former Ohio State defensive end Nick Bosa signed the most lucrative contract in NFL history for a defensive player at five years, $170 million. The deal averages $34 million a year, including a $50 million signing bonus and $88 million in fully guaranteed money. (Source: NBC Sports)

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. 

 Stock investing includes risks, including fluctuating prices and loss of principal. 

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