Planning for Volatility

Last week was a mixed week for the markets with seesaw movement. The week began with selloffs, but losses were offset by stocks climbing back as the week ended. S&P 500 sector losses for the week were led by Consumer Discretionary and Materials, while gains came from Consumer Staples. There were some positive economic data points that helped in quelling prior fears about the state of the economy, but it was a week denoted by volatility.

Weekly Performance

Data Source: Factset®        Performance Period:      8/5/2024  to 8/9/2024

Last week in the economy, the S&P final U.S. services PMI for July came in at 55.0, below the forecast of 55.9. Inflation in services has been cooling, and growth in the sector has been resilient, especially for healthcare and financial services. This comes in contrast to the manufacturing sector, which saw decreased demand and output in July. The U.S. Trade Deficit dropped lower than expected due to a greater number of exports and a softening domestic demand, with imports increasing by only 0.6%. After a weak unemployment print, there was relief with a somewhat warmer Initial Jobless Claims coming in lower than forecasted at 233,000.

Consumer credit for June came in lower than expected at $8.9 billion. This lower rate of credit extension, along with rising delinquencies in other reports, are signs of financial stress being felt by households.

This week in economic reports, the NFIB Optimism Index will report the level of small business optimism from July. The Producer Price Index (PPI) unveils input price inflation for July. On the heels of PPI comes the Consumer Price Index, another inflation tracker that provides data about the cost consumers pay for goods and services. Initial jobless claims data comes on Thursday and is being closely watched.  Finally, housing starts and building permits numbers are released on Friday for an outlook on the housing market.

Economic data is being closely tracked by investors for signs of weakness or strength.  We believe the sheer volume of data coupled with “jumpy” investors will create exaggerated short-term volatility. In addition to the economic data, there continue to be significant declines in the Japanese benchmark stock index and major tech stock selloffs. The events of this past week serve as a reminder of the volatility sometimes seen in the markets and the importance of having a strategy rather than panicking. As Proverbs 21:5 observes, “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights

 Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights. Securities offered through American Portfolios Financial Services, Inc. of Holbrook, New York, 631.439.4600,(APFS), member FINRA, SIPC.  Faithward Advisors is not owned or operated by APFS. Faithward Advisors offers Investment Advisory services through Ambassador Advisors, an SEC Registered Investment Advisor. Dream More, Plan More, Do More is a registered trademark of Faithward Advisors, LLC, Reg. U.S. Pat. & Tm. Off. Any opinions expressed in this forum are not the opinion or view of Faithward Advisors or American Portfolios Financial Services, Inc. (APFS). They have not been reviewed by either firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.