Major stock indexes climbed for the fifth week in a row, pushing higher on the bull market’s two-year birthday. The S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) rose by 1.11% and 1.21% on the week, respectively, reaching new records. Meanwhile, the Nasdaq Composite (NDAQ) and the Nasdaq-100 (NDX) added 1.13% and 1.18%, ending the week less than 2% below their historic peaks.
Economic data was in the spotlight throughout the choppy week, with the Fed member speeches and the release of the September Federal Open Market Committee (FOMC) meeting minutes also drawing significant investor attention.
The week started on the wrong foot for stocks as the odds of another jumbo interest-rate cut faded following the previous week’s stronger-than-expected jobs data, which underscored the resilience of the U.S. economy. Although the economy’s strength boosted optimism for a soft-landing, it raised worries that the policymakers may slow or even pause their rate-easing pace. Thursday’s slightly hotter-than-expected CPI, which came along with a rise in jobless claims, added to investor confusion about the economy’s health, muddying the outlook for monetary policy.
Friday’s tepid producer-price inflation data, serving as a leading indicator for consumer inflation, rekindled optimism that the Federal Reserve is on the right path. In addition, the FOMC minutes revealed that most of the rate committee members supported the 0.5% rate reduction, agreeing that inflation risks have diminished while risks to the job market health have become elevated. Markets are now pricing in a 0.25% interest rate cut in November.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» September’s Retail Sales – Thursday, 10/17 – This report provides information on the amount of money consumers are spending on various durable and non-durable goods. Retail Sales is a leading indicator of the economy’s health, providing an outlook into the current quarter’s economic growth as well as into the inflationary factors on the side of demand.
» September’s Industrial Production – Thursday, 10/17 – This report shows the volume of production of U.S. industries like manufacturing, mining, and utilities. Although industrial production accounts for a smaller portion of the economic activity than services, its sensitivity to consumer demand and interest rates makes it a leading indicator of GDP growth and economic performance.
» September’s Building Permits and Housing Starts – Friday, 10/18 – These reports provide valuable insights into the health of the housing market, as well as the overall economy since housing demand correlates with economic growth and consumer sentiment. Both reports are leading indicators, used by economists and analysts, among other data, to measure current demand and to estimate near-term trends in real estate and related industries.
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