September Continues Historical Norm, Stocks Down for 2nd Week…..

Stocks saw noticeable pressure to close out a second-straight weekly drop as September seems to be living up to its typical volatile norm. The Materials sector was the worst performer as metal prices continue to soften, while heavyweight Information Technology issues applied the most downside pressure. The markets continued to grapple with uncertainties regarding the Delta variant, global monetary policy tightening timing, fiscal stimulus, and persistent supply-chain challenges. Volume and volatility were likely bolstered on this quadruple witching day where options and futures contracts on stocks and indexes simultaneously expire. The economic calendar showed preliminary September consumer sentiment improved from the prior month’s tumble but at a pace that was below forecasts. Treasuries were lower to lift yields and the U.S. dollar gained ground. Crude oil prices were lower, and gold extended a second-straight weekly drawdown. In equity news, United States Steel Corporation fell despite issuing stronger-than-expected guidance, General Motors extended downtime at some North American plants due to the global chip shortage, and Thermo Fisher Scientific offered guidance that trounced the Street’s forecast. Europe finished lower to close out the choppy week, while Asia finished mostly higher as China and Hong Kong trimmed weekly drawdowns.

The Dow Jones Industrial Average declined 166 points (0.5%) to 34,585, the S&P 500 Index fell 41 points (0.9%) to 4,433, and the Nasdaq Composite decreased 138 points (0.9%) to 15,044. In heavy volume, 3.3 billion shares were traded on the NYSE and 6.4 billion shares changed hands on the Nasdaq. WTI crude oil declined $0.64 to $71.97 per barrel. Elsewhere, the gold spot price fell $5.00 to $1,751.70 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.3% higher to 93.19. Markets were lower for the week, as the DJIA dipped 0.1%, the S&P 500 declined 0.6%, and the Nasdaq Composite decreased 0.5%.

September consumer sentiment improves but at a smaller pace than expected…..

The September preliminary University of Michigan Consumer Sentiment Index improved to 71.0, versus the Bloomberg estimate calling for a rise to 72.0 from August’s 70.3 reading. The index rose modestly as a decline for the current conditions portion of the index was met with a gain for the expectations component. The 1-year inflation forecast ticked higher to 4.7% from August’s 4.6% rate, in line with forecasts, and the 5-10 year inflation forecast remained at the prior month’s 2.9% level.

The University of Michigan said, “The steep August falloff in consumer sentiment ended in early September, but the small gain still meant that consumers expected the least favorable economic prospects in more than a decade.”

Treasuries were lower with the yield on the 2-year note ticking 1 basis points (bp) higher to 0.23%, the yield on the 10-year note rising 3 bps to 1.37%, and the 30-year bond gaining 2 bps to 1.91%.

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