Hope you are all doing well. The major U.S. stock indexes alternated between small daily gains and losses before mounting a modest rally on Friday to end with fractional gains for the week. It was enough to push the S&P 500 and the Dow just above the record highs they set the previous week. The NASDAQ ended up and is now 2.7% below the record high that it set three months ago. September’s performance closely resembled the August results. In both months stocks fell sharply in the opening week but recovered to finish positive overall. The S&P 500 finished September at a record high and posted an overall total return of 2.1%. The index’s been positive ten out of the past eleven months. Pete Rose passed away this week. I have broken down this week’s update using some of his more memorable quotes.
“I’d walk through hell in a gasoline suit to play baseball.” – Pete Rose
Pete’s gasoline suit got more expensive this week. The price of U.S. crude oil jumped about 9% for the week to nearly $75 per barrel amid escalating geopolitical tensions in the Middle East. Friday’s price was the highest since late August, but it’s still well below the recent high of around $83 in early July. Rising oil prices lifted energy stocks as well. The energy sector posted the biggest weekly gain among the 11 S&P 500 sectors. Energy sector stocks were up an average of 7% for the week.
“Somebody’s gotta win and somebody’s gotta lose and I believe in letting the other guy lose.” – Pete Rose
The International Longshoremen’s association (ILA) seem to be the winner of their recent strike. The 47,000-member union which represents workers in major Eastern U.S. and Gulf Coast ports went on strike for higher pay and protections. They got it. The agreement between dock workers and port operators calls for a wage hike of 62% over the next six years, raising average wages from $39 per hour to about $63 per hour over the life of the contract. This strike impacted 36 ports across the East Coast. It’s estimated the damage to the U.S. economy from the strike was over $1 billion per day in lost economic activity. That sounds like a big number but it’s still a small piece of the $29 trillion U.S. economy. Luckily the strike was resolved after only three days which helped lead to the rally we saw at the end of the week.
“If you screw up and do something, don’t lie about it; come clean.” – Pete Rose
We got more revisions of the jobs numbers and a great jobs number for September. Unlike the previous revisions which were major negative corrections these revisions were smaller and positive. The U.S. economy generated 254,000 new jobs in September, that is the strongest result in six months. The jobs numbers for July and August were revised upward by a total of 72,000. The unemployment rate slipped to 4.1% from 4.2% the previous month. After two months of weak labor reports and downward revisions, markets welcomed this new positive data.
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