Last week saw Wall Street generally close with a mixed bag of results. The Nasdaq, the S&P 500, and the Global Dow ended the week higher, while the Dow and the Russell 2000 lost value. Traders tried to digest comments from the annual Jackson Hole Economic Symposium last Friday. The Fed chair indicated that, despite inflation coming down, prices remain too high. The central bank is prepared to hike interest rates further until inflation steadies at the Fed’s 2.0% target. Powell’s suggestion of more interest rate increases sent bond yields higher, with two-year Treasury yields rising to 5.07%. Among the market sectors, consumer discretionary and information technology gained 2.0%. Crude oil prices declined for the second straight week, while the dollar rose for the fourth consecutive week.
Last Week’s Economic News
- Sales of existing homes declined in July and 16.6% since July 2022.
- Unlike sales of existing homes, the market for new single-family homes accelerated in July.
- New orders for durable goods declined 5.2% in July, the first monthly decrease since February.
- The national average retail price for regular gasoline was $3.868 per gallon on August 21, $0.018 per gallon higher than the prior week’s price.
- For the week ended August 19, there were 230,000 new claims for unemployment insurance, a decrease of 10,000 from the previous week’s level.
Eye on the Week Ahead
The last week of August includes many important economic reports. The second estimate for the second-quarter gross domestic product is out this week. The initial estimate showed the economy expanded at an annualized rate of 2.4% over the first quarter. The report on personal income and expenditures for July is available this week. Investors should pay particular attention to the personal consumption expenditures price index, a measure of inflation favored by the Federal Reserve. Finally, the week ends with the July employment figures. Job growth expanded in June, but at a much slower pace compared to the monthly average for 2023.
Have a nice week!