Last week saw solid gains in the S&P 500 and the Dow, both of which closed at new all-time record highs on Friday. The Nasdaq pulled back slightly, driven in part by some mid-week softness in biotech. Small and midcap stocks were mixed.
Internationally, most developed market equities were stronger, while emerging market equities in aggregate were lower. Chinese stocks rallied early in the week, only to be met by renewed selling pressure on regulatory fears as the week progressed. MSCI’s China Index finished the week essentially unchanged.
Bond yields moved higher early in the week before falling abruptly on Friday in the wake of a significant decline in the University of Michigan’s consumer sentiment gauge. In the end, 10y and 30y Treasury yields both finished the week 2 basis points lower than where they started. Investment grade credit spreads held firm, while high yield spreads moved wider.
Economic data was plentiful last week:
* The JOLTS report showed more than 10 million US job openings
* Headline CPI held steady at +5.4% y/y (+4.3% ex food and energy)
* PPI rose to +7.8% y/y (+6.2% ex food and energy)
* Initial jobless claims fell for a 3rd straight week, to 375k
* U of M Consumer Sentiment fell to 70.2 in August, a new pandemic-era low