Presented by Seth Leishman. In this week’s recap: Despite signs of a good economy, stocks have a lackluster week.

The Week on Wall Street

Stocks weakened ahead of this week’s Federal Reserve meeting and amid persistent concerns about the Delta variant’s impact on the economy.

The Dow Jones Industrial Average was flat (-0.07%), while the Standard & Poor’s 500 fell 0.57%. The Nasdaq Composite index lost 0.47% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.65%. (See endnotes 1,2,3)

Stocks Struggle

Despite a string of economic reports painting a healthy picture of the U.S. economy, investor sentiment remained cautious. While tamer inflation and higher-than-expected retail sales may typically be constructive for the market, any investor enthusiasm it generated was fleeting.

The market appeared all week to be encumbered by a tentative, apprehensive mood. The Delta variant remained an overhang, but it was more than that. Investors appeared concerned about September, which historically has been a weak month for stock prices. The market also was concerned about fiscal and tax policy proposals emanating from Washington D.C., news of an economic slowdown in China, and by what the Fed may announce following its September 21-22 Federal Open Market Committee meeting.

Taking the Economic Pulse

A series of economic reports released last week provided investors with a broad snapshot of the state of the economic recovery.

Inflation showed signs of moderating, rising 0.3%—an elevated rate, but well below June and July’s increases of 0.9% and 0.5%, respectively. The consumer remained strong as retail sales rose 0.7%, an unexpected jump. Manufacturing reached pre-pandemic, while the labor market continued its recovery, with initial jobless claims coming in near pandemic lows and continuing claims hitting a new pandemic low. (See endnotes 4,5,6,7)

Tip of the Week

Donations of clothing and other household items in good condition can be deducted on your federal tax return if made to a 501c(3) organization. Be sure to get a written acknowledgment from the charity.

The Week Ahead: Key Economic Data

Tuesday: Housing Starts.

Wednesday: Existing Home Sales. FOMC (Federal Open Market Committee) Announcement

Thursday: Jobless Claims. Index of Leading Economic Indicators. PMI (Purchasing Managers’ Index) Composite Flash.

Friday: New Home Sales.

Source: Econoday, September 17, 2021

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

The Week Ahead: Companies Reporting Earnings

Tuesday: Adobe, Inc. (ADBE), Fedex Corporation (FDX), Autozone, Inc. (AZO).

Wednesday: General Mills (GIS).

Thursday: Costco Wholesale Corporation (COST), Darden Restaurants, Inc. (DRI), Trip.com Group (TCOM).

Source: Zacks, September 17, 2021

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Quote of the Week

“A person is a person because he recognizes others as persons.”

DESMOND TUTU

Seth Leishman may be reached at 530-273-4425 or send him an email.

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CITATIONS:

1. The Wall Street Journal, September 17, 2021

2. The Wall Street Journal, September 17, 2021

3. The Wall Street Journal, September 17, 2021

4. CNBC, September 14, 2021

5. The Wall Street Journal, September 16, 2021

6. MarketWatch, September 16, 2021

7. The Wall Street Journal, September 16, 2021

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Ostrofe Financial Consultants Inc, a registered investment advisor and separate entity from LPL Financial.The information contained in this e-mail message is being transmitted to and is intended for the use of only the individual(s) to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby advised that any dissemination, distribution or copying of this message is strictly prohibited. If you have received this message in error, please immediately delete.

Economic Update (Sep 20, 2021)