Jun
11
Weekly Review
Filed Under Uncategorized | 1 Comment
The Weekly Market Review
By: William E. Thomason
|
Index |
Started Week |
Ended Week |
Change |
% Change |
YTD |
|
DJIA |
13820.19 |
13895.63 |
75.44 |
0.5 % |
11.5 % |
|
Nasdaq |
2671.22 |
2701.50 |
30.28 |
1.1 % |
11.8 % |
|
S&P 500 |
1525.75 |
1526.75 |
1.00 |
0.1 % |
7.6 % |
|
Russell 2000 |
813.11 |
805.45 |
-7.66 |
-0.9 % |
2.3 % |
Briefing.com
October 1 2007 –
U.S. stocks closed lower Friday with a lot of economic data falling largely in line with expectations and investors looking for clues as to whether the Federal Reserve would cut interest rates again at a policy meeting in late October.
As we closed out the 3rd quarter, the Dow ended the month of September up 4%, with the S&P 500 up 3.6%, the Nasdaq up 4%, and the Russell 2000 up 1.6%.
For the week, the biggest news came from my hometown of Detroit. On Monday, approximately 73,000 workers in the United Auto Workers union went on strike against GM, as the two sides failed to reach an agreement over cuts in health care costs and union demands to keep U.S. production jobs. The markets trended modestly higher on Tuesday, however, as disappointing earnings/sales updates from several notable companies and weak economic data were offset by strength in the Technology sector. Then good news came on Wednesday as a tentative deal between General Motors and the UAW to end a strike came and alleviated some concerns that a prolonged strike could hurt economic growth.
What’s coming next
Stocks will take their cues from economic data this week, with the September jobs report on Friday expected to provide clues on whether the Federal Reserve can step in with more rate cuts to boost the slumping U.S. economy. There has been a positive vibe on Wall Street since the Fed cut interest rates by an unexpected 50 basis points on Sept. 18. Many now hope that more rate cuts will follow, but concerns remain that the economy might still slump into recession. Data this week, especially the all-important September jobs report on Friday, will be keenly awaited for hints about both the economy and Fed policy.
All of the week’s data will take on added significance and should help set the stage for the Federal Reserve’s October policy decision. Key among other data this week will be the September manufacturing index by the Institute for Supply Management, along with vehicle sales for the month, to be released today. Tuesday will bring pending home sales for August. On Wednesday, the ISM’s non-manufacturing index, the ADP employment report and weekly mortgage data will be released.
Basically, the Fed cut rates by 50 basis points to allow it to stay on the sidelines through the end of October and see how subprime or other tentacles from housing are affecting the economy. Besides seeking hints about monetary policy, investors are also starting to look toward the upcoming third-quarter earnings season, which will officially kick off after Alcoa reports on Oct. 9. It won’t be that earnings are that bad, as subprime issues hit in the middle of the quarter, it will be more about discussions by management of what they’re seeing in the current quarter. What I’m hearings about earnings is that domestic is not terrific and international is doing pretty well. In addition, we’re starting to see a shift from small-cap to large-cap stocks, and from value toward growth, which favors multinational companies.