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The record highs that markets reached last Monday, following a September to remember, began to erode by the end of the week on geopolitical uncertainty. The S&P 500 sector gainers were Energy and Utilities, while Consumer Discretionary and Materials lagged. Waters were a bit choppy between largely good economic data and broader uncertainty surrounding the potential port strike and overseas conflicts. Still, the week ended on a more positive note following reassuring news.
Data Source: Factset® Performance Period: 9/30/2024 to 10/4/2024
Last week’s economic data kicked off with JOLTS August job openings data beating the forecast and July’s numbers. Meanwhile, hires and quits reached their lowest level since early 2020. Manufacturing PMI for September was at 47.3, within contraction territory as a reading below 50 points indicates. Services PMI was in expansion territory at 55.2 for last month. Factory orders for August were only slightly lower, decreasing 0.2%.
The week offered a slew of news in the labor market. September added 143,000 jobs per the ADP employment report, beating estimates and August’s numbers. Initial jobless claims on Thursday ticked up only a little higher than expected at 225,000. Last month’s nonfarm payroll number was at 254,000 – soaring above August’s 159,000. Digging into the strong numbers for a typically lagging month, we saw many jobs added in services and healthcare, but tech, which has seen rounds of layoffs, did not share in the hiring enthusiasm. The unemployment rate for September came in a tenth of a percent below the forecast at 4.1%, and wages increased 0.4% for the month.
This week brings more data to continue painting the economic landscape with consumer credit and the consumer price index being released. The week also brings the conclusion of the first round of the MLB playoffs, where, for the first time in history, all four divisional series were tied 1-1 after two games. Outside of baseball, the NFIB optimism index will reveal small business sentiment for the future, while wholesale inventories and the producer price index give insight into the flow of retail items and input prices.
Big news came last week when port workers all along the East and Gulf Coasts went on a three-day strike demanding better compensation and automation bans. On October 1st, a contract expired between the massive union known as the International Longshoremen’s Association and the alliance of container carriers, the United States Maritime Alliance (USMX). When it appeared that no quick resolution was on the horizon, a temporary agreement was reached to raise wages and continue the contract until mid-January. Thankfully, on October 4th, dock workers resumed their normal duties, as the union and USMX continue to discuss terms for a new contract. Given the number of imports along the East and Gulf coasts, the strike reportedly caused a week’s worth of backlog per day. Just in the three days, chaos had ensued with shipping containers being sent to the wrong ports, staying offshore, both causing shipping costs to rise. A longer strike could have meant shortages of certain imported goods and even higher prices.
Amidst the uncertainty, there were reports of emptied shelves at large retailers as people stocked up, followed by stories on social media of attempts to return hoarded goods. Still, large companies like Costco and Walmart had reported being well prepared for any supply chain disruptions. This situation serves as a good reminder that panicked decisions are rarely wise and putting the same amount of energy on the real source of our provision is a much better endeavor. As Jesus says in Matthew 6:31-33, “Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. But seek first the kingdom of God and his righteousness, and all these things will be added to you.”
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.