You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Profit from the Pros By Kevin Matras Executive Vice President
Stocks Lower On Friday, Mostly Lower Last Week, All Eyes On The Fed This Week
Stocks fell on Friday with most of the indexes down by -1.00% or more.
The Dow eked out a small gain for the week, but the others (S&P 500, Nasdaq, small-cap Russell 2000, and mid-cap S&P 400), all gave up their intraweek gains and ended lower. Not by much. But lower nonetheless.
Friday's Quadruple Witching (that's when index futures, stock futures, index options, and stock options all expire), might have had something to do with the extra volatility. But after a busy week of mixed inflation reports, and this week's upcoming FOMC announcement, there was probably a fair amount of position squaring taking place.
The Fed begins their 2-day FOMC meeting on Tuesday, September 19, and then gives their FOMC announcement on Wednesday, 9/20.
At the moment, the odds of a rate hike this month are only at roughly 5%. But the odds shift to a 40% chance for a hike when they meet in November. (And there's still one more meeting after that in December before the year is over.) Of course, nothing is set in stone. But that's the way the odds are looking.
In other news, Friday's Empire State Manufacturing Index rose to 1.9 vs. last month's -19.0 and views for -10.0.
Industrial Production rose as well with a 0.4% m/m increase vs. the consensus for 0.1%, while Manufacturing Output rose 0.1%, which was in line with expectations. The Capacity Utilization Rate ticked up to 79.7% vs. last month's 79.5% and views for 79.3%.
And Consumer Sentiment came in at 67.7, slipping from last month's 69.5 and missing estimates for 69.2. Elevated inflation is no doubt taking a toll on sentiment. Although, the year-ahead inflation expectations dipped to 3.1% vs. last month's pace of 3.5%. But that's still too high.
We also learned that the United Auto Workers (UAW) Union on Friday decided to strike the 'Big 3' automakers. It's the first time all three car companies were struck at the same time. The union, however, was implementing a targeted strike, rather than shutting down work at all plants. The union heads say it's to send a message that they are serious and to keep management guessing as to what happens next and when. But the shutdown will likely expand to more and more locations the longer the talks drag on with no agreement.
Traders will also be watching a potential shutdown of the government if Congress can't come to an agreement on a budget (11 spending bills) by the end of September 30, as a new fiscal year begins on October 1.
You can be sure there will be lots of grandstanding and brinkmanship by both parties as we head towards the deadline in just two short weeks.
In the meantime, all eyes will be on the Fed this week (Wednesday).
And we'll see if the market can regroup and start heading back up. Statistically, the odds favor a rally. Since 1950, if the S&P is up by more than 15% thru August (it was up 17.4% this year), with August being down (which it was), then September is typically up with a median gain of 3.3%, and a win ratio of 86% (6 out of 7 instances).
We'll see if the back half of the month can pull this out.
See you tomorrow,
Executive Vice President, Zacks Investment Research
Catch breaking news on your stocks and funds at a glance, including timely recommendation changes ... Zacks Ranks ... Industry Ranks ... earnings announcements ... earnings estimate revisions ... and more. And now you can screen for new stocks to improve portfolio performance.
Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. Read More »
Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com.
Visit Success Stories to hear how Zacks research, tools and portfolios help our members outperform the market.
Get all of our market insights and much more when you connect with us.
This free resource is being sent by Zacks.com. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through July 31, 2023. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed above.
Zacks Emails If you would prefer to not receive future profit-producing emails from Zacks.com the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please click here and confirm your request. If you have trouble with the unsubscribe link, please email firstname.lastname@example.org.
Zacks Investment Research 10 S. Riverside Plaza, Suite 1600 Chicago, IL 60606
Due to inactivity, you will be signed out in approximately: