• J. J. Wenrich CFP®

Weekly Market Performance – Markets Continue Higher Amid Positive Earnings

Market Blog


Index Performance


U.S. and International Equities


Major U.S. and International Markets Finished Higher


The major equity markets finished solidly in the green this week as we head into the heart Q3 earnings season. International markets finished the week higher, as both developed markets (MSCI EAFE Index) and emerging markets (MSCI EM Index) were up, however they underperformed their counterparts in the United States. For the second straight week every sector, with the exception of communication services, finished the week higher as investors took advantage of oversold conditions resulting fromlast month’s market pullback.


Earnings, Earnings, Earnings

So far, less than 20% of companies have posted their 3rd Quarter results, however the vast majority of these reports have been better than expected, with approximately 80% of S&P 500 companies beating their estimates. Those who have reported so far have shown that firms have been able to work through supply chain/labor challenges that many industries are facing.


Fixed Income and Commodities Recap


Bonds Reverse Course While Commodities Ended Mixed

The Bloomberg Barclays Aggregate Bond Index finished lower, reversing last week’s positive return, as investors sold off bonds on the back of inflation concerns. High-yield corporate bonds, as tracked by the Bloomberg Barclays High Yield index, continued their run, finishing slightly higher for the second straight week.


Oil finished higher for the fifth straight week amid worldwide supply concerns, while natural gas’ price pulled back as some investors took profits from earlier run up. Silver finished higher for the second straight week as investors anticipated higher future demand as signs of broad economic improvement continue to emerge.


Economic Weekly Roundup


Beige Book

The Federal Reserve releases its Beige Book this week, which captures qualitative observations made by community bankers and business owners. It showed general optimism about the economic outlook despite moderating growth and elevated uncertainty. LPL analysis of sentiment around inflation and supply chain disruptions indicates that these concerns may be near their peak, however we still believe economic progress could take time.


Leading Economic Index

The Conference Board released its Leading Economic Index (LEI) report for September this week, showing the series rose slightly month over month. This reading represented the lowest rate of increase since February, which reflects a somewhat murky economic outlook, however the reading does still signal future growth is on the horizon.


Unemployment Claims Continue to Show Improvement

Initial claims for unemployment insurance fell for the second straight week, dropping to 290k. Moreover, continuing claims also reached a milestone this week, falling below 2.5 million for the first time since the start of the pandemic.


The following economic data is slated to be released during the week ahead:

  • Tuesday: September building permits and new home sales, August Federal Housing Finance Agency Home Price Index, August S&P Case-Shiller Home Price Index, October consumer confidence

  • Wednesday: September durable orders and wholesale inventories

  • Thursday: Weekly initial and continuing unemployment claims, Q3 GDP, September pending home sales

  • Friday: September Personal Consumption Expenditures, October University of Michigan sentiment






IMPORTANT DISCLOSURES


This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.


References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. All market and index data comes from FactSet and MarketWatch.


Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.


U.S. Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.


For a list of descriptions of the indexes referenced in this publication, please visit our website at lplresearch.com/definitions.


This Research material was prepared by LPL Financial LLC.


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