Hello, I’m Greg Curvall, Senior Portfolio Manager with Fifth Third Bank.
The 3 major U.S. benchmarks bounced back last week with the DOW, S&P 500 and NASDAQ all recording gains. The U.S. 10-year Treasury yield was mostly unchanged, finishing the week at 1.3 percent. The U.S. dollar slipped and oil finished positive for the week.
The Jackson Hole Conference went according to plan as Fed Chair, Jerome Powell, announced the Fed’s tapering which will most likely begin before year-end. He confirmed that the taper will not immediately result in a rate hike, saying that there is "much ground to cover" before any rate increase.
Covid-19 cases continue to spike, with hospitalizations growing, especially in children. More and more cities have begun requiring mask mandates, a continuation of a trend, which began several weeks ago.
52 percent of the total population is fully vaccinated according to the CDC website, with the most at-risk group, individuals 65 years of age or older, reaching at least 81% fully-vaccinated.
The situation in Afghanistan continues to evolve and dominate headlines. European and U.S. citizens are rushing to exit Afghanistan by way of the Kabul airport. Two explosions were reported at and around the airport on Thursday, leaving at least 13 U.S. troops dead and 18 injured. President Biden promised retaliation for the attacks and swiftly ordered a successful drone strike on two high-ranking members of ISIS-K, the terrorist group who claimed responsibility for the initial attacks.
President Biden still expects to pull the military, or most of it, from Afghanistan on or before August 31st. Even as G-7 leaders have pled for the date to be pushed back, Biden remains committed to his promise. The Taliban has made it known that they do not want to the deadline to be extended.
There were several impactful economic releases last week. Durable Goods Orders fell in July, reflecting a decline in commercial aircraft orders. Second quarter GDP rose 6.6 percent, which was slightly below estimates, but ahead of the first reading. Personal Consumption grew at an annualized rate of almost 12 percent, also missing forecasts, but a revision upward from the previous reading. Personal income jumped by 1.1 percent in the month of July, well ahead of expectations, providing more evidence of mounting inflation. Core Personal Consumption Expenditures, the Fed’s preferred measure of inflation, rose 3.6 percent year-over-year in July, in line with expectations.
In the week ahead, we have a strong week for economic data, including ISM Manufacturing, Factory Orders and Market PMI reports. However, the biggest report of the week will be the August Jobs report on Friday. Economists expect the report to show 750K jobs added in August and a decline in the unemployment rate, down to 5.2 percent.
As always, will be watching and reporting back to you next week. Thank you.