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Last Week on Wall Street
Economic data for the week included U.S. GDP growth for Q2 revised upward, along with higher durable goods orders and consumer confidence, in addition to gains in personal income and spending. Home prices remain strong on a trailing annual basis, although the pace has decelerated.
Equities were mixed, with value outperforming growth sectors and foreign stocks. Bonds generally fell back as yields ticked up a bit across the curve. Commodities were mixed, with energy and metals prices down for the week on demand concerns.
U.S. stocks were mixed on lower volume the last week of summer, with ‘value’ seeing gains of over a percent, while ‘growth’ fell back. Sector results reflected this, with financials gaining 3% on the week, followed by industrials and materials; on the other hand, technology stocks fell back by over -1% (largely the impact of NVIDIA), along with lesser declines in consumer discretionary (Tesla and Target). Real estate saw minor gains, despite higher yields during the week.
Foreign stocks were mixed, impacted by a one percent rise in the value of the U.S. dollar. In developed markets, gains in the U.K. were coupled with little change in Europe and Japan as investors continue to expect an European Central Bank rate cut in September. These regions were offset by declines in emerging markets. With the exception of India, which saw gains, the index was led downward by drops in China, Brazil, Korea, and Mexico, with continued demand concerns for the former.
Bonds fell back last week, as interest rates ticked a bit higher along with inflation not decelerating and hopes for a -0.50% interest rate cut in September seeming to fade a bit. Senior floating rate loans were the only positive performers, while high yield saw little change. Foreign bonds fell back generally, impacted by the stronger U.S. dollar.
Commodities were mixed, with gains in agriculture offset by declines in energy and metals, more typical with a stronger dollar. Oil prices fell -2% last week to under $74/barrel, as demand concerns in China outweighed other near-term factors. The prior weekend missile exchange between Israel and Hezbollah pushed up prices a bit, while the government in the Eastern half of Libya shut down oil production in the midst of a power struggle with the Western half of the country. However, prices have been held down by apparent spare capacity and potential for OPEC+ to reverse production cuts in 2025, all of which have kept geopolitical concerns at bay for now.
Fact of the Week
The new CEO of Starbucks, Brian Niccol, is in the hot seat after the company announced he would travel by private jet three days a week from his California home to the Seattle office. Greenpeace, a nonprofit organization focused on exposing environmental problems, has started a petition to ban private jets (source: CNN).
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