Staying The Course?

Markets were volatile throughout last week as some were optimistic, but others took lackluster economic news as bad news. Major indices, like the Dow Jones, S&P 500, and Nasdaq saw significant losses throughout the week. The S&P 500 was led by consumer discretionary and consumer staples, while energy and information technology lagged.

Weekly Performance

Data Source: Factset®        Performance Period:      9/2/2024  to 9/6/2024

Last week brought more mixed economic data. On Wednesday, factory orders outpaced the forecast by increasing 5.0%. The JOLTS Job Openings for July dipped significantly below expectations, with nearly 7.7 million openings as opposed to the 8.1 million that were projected. On Thursday, the ADP employment report revealed far fewer jobs were added than expected, with 99,000 relative to the anticipated 144,000 jobs. That said, the initial jobless claims came in below the week prior and the forecast. On Friday, the unemployment rate came in at 4.2%, which matched the forecast. Manufacturing payrolls were significantly lower than anticipated, when they dropped by 24,000 in August. Yet, hiring increased, on the whole, as nonfarm payrolls ticked up from last month to 142,000. In some ways the labor market appears to be cooling, especially in manufacturing, but unemployment is still reasonably low and hiring increased according to the Bureau of Labor Statistics.

On September 17th and 18th, the FOMC will have a meeting that many believe will bring a rate cut. For this reason, jobs data continues to be closely watched. While the Fed has been fighting inflation, its other mandate is maximum employment. Any soft labor data trickling in triggers the markets to start pricing in rate cuts. Early in the week, consumer credit and the NFIB Optimism Index will reveal the state of borrowing and the small business outlook. On Wednesday, CPI offers insight into the state of inflation for consumers. Initial jobless claims, PPI, and consumer sentiment are released later in the week to add the next puzzle piece to this year’s economy.

A notable event was recently confirmed when Warren Buffett’s Berkshire Hathaway hit $1 trillion in market value. This makes it the first U.S.-based company outside of the tech sector to hit such a value. While the company has some tech holdings in the portfolio, there are several other sectors represented, such as insurance, financials, retail, and energy. Buffett’s strategy has been one of long-term value rather than short-term gains, much like the tortoise in its race with the hare. So far this year, Berkshire Hathaway’s stock has shot up almost thirty percent. Perhaps investors are optimistic about the future of the economy, or maybe they see the investment as a haven for cash in a time of mixed markets (as many have with the “magnificent seven” in recent years). Regardless, the news serves as a reminder about the importance of having an investment strategy and thinking long-term. As Proverbs 13:11 says, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”

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.