Weekly Market Recap

Risk assets struggled through the holiday-shortened work week as new case counts continued to rise in the US. In an effort to improve workplace safety, the Biden Administration announced on Thursday that the Department of Labor would direct all companies with more than 100 employees to require vaccines or weekly negative tests. The constitutionality of this directive was immediately called into question by several Republican governors.

Economic news was fairly encouraging. Initial jobless claims fell to a pandemic low of 310k, and the Job Openings and Labor Turnover Survey showed a record 10.9 million jobs available. Producer price inflation (PPI) remained elevated on a y/y basis at +8.3%, but with a smaller sequential gain in August relative to July.

Despite solid economic news, US equities finished lower across all sectors and market caps. Small caps underperformed, as did real estate stocks in a reversal of recent strength. International stocks also fell, albeit to a lesser degree.

Bond markets were little changed. 10y Treasury yields rose 2 basis points, while 30y yields fell by a basis point. Investment grade credit spreads rallied as a rampup in new corporate issuance was met by more-than-ample demand.

In commodity markets, oil and natural gas both finished higher in the aftermath of Hurricane Ida, with natural gas briefly eclipsing $5/MMBtu for the first time since early 2014. Away from the energy complex, most other commodity prices were little changed. Inflation hedges (chiefly gold & bitcoin) fell.

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