Here’s what happened in the markets last week. The Core Personal Consumption Expenditures (PCE) for August fell below 4% for the first time in two years. Stocks initially responded positively to Friday’s report but retreated amidst looming threats of a US Government shutdown over the weekend. However, an impending shutdown was averted as the US House and Senate passed a spending bill just hours before the scheduled shutdown at 12:01 AM on Sunday. Stocks (S&P500) and bonds(US Agg) finished the week with losses of -0.71% and -0.96%, respectively.
This week will see the release of the last Employment and JOLTS report before the Federal Reserve’s next meeting. Slowing employment may deter the Fed from implementing a rate hike. As we usher in Q4, whether stocks will rally into the year-end after a negative return in September remains to be seen. Notably, September returns were negative in 2020, 2021, and 2022, yet the subsequent fourth quarters saw positive returns. Historical returns do not guarantee future results, but they are worth noting.
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