Economy
The drought of economic data lingered this week as the shutdown of the federal government continues to deprive us, and perhaps more importantly the Fed, of the usual string of reports from the Bureau of Labor Statistics, Department of Labor, and other government agencies. The Federal Open Market Committee (FOMC) is set to announce it's decision on what to do with interest rates in less than two weeks, and the CME Group's FedWatch tool implies the market is 99% sure we'll see a 0.25% cut at the upcoming meeting. The rate cut was expected before the government shutdown, but we're sure Jerome Powell would prefer to have both the current inflation rate and unemployment rate in his hands ahead of the press conference. The Cleveland Fed publishes its forecast for inflation, and if accurate, we're sitting somewhere between 2.9% - 3%, above the Fed's target of 2%. The Chicago Fed recently began publishing it's real time estimates on the labor market, and if accurate, the unemployment rate is currently around 4.3%.
Markets
Markets staged an impressive comeback this week, with the S&P 500 rising 1.7%. Last Friday's Chinese trade war tension flareups all but subsided with a Truth Social post this past Sunday from the President saying, "Don't worry China, it will all be fine!" This was enough to calm markets, at least for the time being. However, during the week, concerns about bad loans made by regional banks came to the forefront on Wall Street. Over the past several days, there have been reports from banks about write downs in the tens of millions of dollars stemming from what they believe to be fraudulent behavior. JP Morgan CEO Jamie Dimon commented that where there is one cockroach, more are surely to be found, but despite some added volatility in the market this week, the S&P 500 was actually higher Friday afternoon compared to when that comment was made on Tuesday.
Tesla will kick off earnings season for the Magnificent Seven stocks next Wednesday in a week that will see several S&P 500 companies reporting.
What We're Reading
- Carwashes are pushing monthly subscriptions- Sherwood
- Understanding the Psychology Behind Your Financial Choices- Derek Hagen
Have a great weekend.
Dogwood Wealth Management