Hope you are all doing well. The major U.S. stock indexes rallied, posting weekly gains ranging from around 3% to 6% that were nearly equal in magnitude to the previous week’s steep losses. Much of September’s volatility has been driven by the information technology sector, which dropped 7% to start the month before gaining back 7% in the latest week. James Earl Jones passed away this week. I have broken down this week’s update using quotes from his iconic Darth Vader character.
I am altering the deal. Pray I don’t alter it any further.
The Federal Reserve is expected to change the direction of its interest rate policy this coming week. As a result yields of U.S. government bonds extended their recent slide. The 10-year U.S. Treasury bonds sank to the lowest yield since June 2023. Friday’s closing yield was 3.66%, down from a recent high of 4.70% in April. We should see lower mortgage rates and a positive move in bond price as longer term yields decline.
I find your lack of faith disturbing.
Despite all the talk of looming recession, the Fed appears to have successfully reduced inflation while maintaining economic growth. Inflation data last week moved markets. Investors continue to gauge consumer price trends and economic readings in order to guess the Fed’s next move. Stocks rose after the Consumer Price Index (CPI) reading. It is one of the last data points the Fed will have prior to its consideration of an interest-rate cut at next week’s meeting. The inflation report showed that consumer prices rose at a 2.5% annual rate in August. That is down from July’s 2.9% figure and the lowest since February 2021.
Be careful not to choke on your aspirations.
The iPhone 16 was unveiled last week. A phone that many investors were hoping would be game changing and start a super cycle of people upgrading their phones. The highlighted upgrades include improved picture quality and better zoom. It disappointed some investors who wanted to see more AI incorporated in the phone. The incremental nature of the Apple Intelligence rollout, could temper consumer excitement and delay purchasing decisions. Apple’s global scale also forces it to have staggered availability of language options. I continue to like the stock. It is up almost 20% year to date and I think it will continue growing though probably not at the same torrid pace.
If you’d like to speak about your investments or your plan, my calendar link is below and you can schedule a phone or zoom appointment.
