Economic Update 10-04-2023
- Economic data for the week included U.S. GDP for Q2 unchanged from prior editions, while expectations for Q3 remain far higher than trend. Durable goods orders rose a bit, although after-inflation results remained depressed. Housing data was mixed, with home prices remaining on an upward trend, while new home sales fell sharply.
- Global equities fell back last week, as the ‘higher for longer’ interest rate message from central banks was a worldwide negative. Bonds fell back as well, due to the further rise in yields, with foreign bonds pressured downward by the stronger U.S. dollar. Commodities were mixed with oil up only slightly last week.
U.S. stocks were lower again last week, on the heels of the expected government shutdown, UAW strike, higher oil prices, resumption of student loan repayments, and fear of higher rates for longer, as discussed above. By sector, energy led with a gain over a percent, growth stocks suffered minimal declines on the week on net, with flattish results for technology, communications, and consumer discretionary. Utilities suffered the most, down nearly -7% largely due to higher interest rates but also largely the result of a sharp decline in the largest sector component (NextEra Energy), which skewed the results. Real estate also fell back over a percent, being affected by higher interest rates. Mid and small cap stocks bucked their recent trends, showing gains for the week.