Summer’s End Observations on the Market and the Economy
According to the Old Farmer’s Almanac, the Autumnal Equinox in the Northern hemisphere was Saturday, September 23, 2023. The beginning of autumn, of course, marks the end of summer. Schools everywhere are back in session, and most summer activities are over or drawing to an end. Now is a good time to review market news and get back to the business of more closely minding your assets, liabilities, and financial goals.
Market News:
What Changed Over the Summer?
The summer of 2023 spanned from June 21st to September 22nd. Let’s take a look at the percent change in closing prices (or yields on bonds) between summer’s start and summer’s end.
| Index | % Change |
| Dow Jones Industrial Average (DJIA) | +0.04% |
| S&P 500 | -1.05% |
| NASDAQ Composite | -2.16% |
| Ten Year US Treasury Note (change in yield) | +0.71% |
If you were solely invested in the DJIA, you could have vacationed the summer away, caring not a bit about your investment or market news, and you’d have missed absolutely nothing. Prices remained basically even, but the good news is, you would have collected a bit of income from dividends.
Investing in the S&P 500, NASDAQ Composite, and the usually sleepy US Treasury market, was a different story, however. All three declined in price. To be sure, the US Treasury bond pays interest, and many listed companies pay a dividend, however, we’d all rather see prices appreciate.
A More Granular Look at
Fall Market News
Activity on the indices does not tell you what happened to all stocks included in an index. There is an old Wall Street saying the goes, “It’s not a stock market, but a market of stocks.” This is a nod to the idea of picking individual stocks to own rather than owning a basket of stocks chosen by others and formed into an index. Market news this season reveals that several well-known consumer retailers struggled, such as:
- Dollar General declined -35%
- Macy’s declined -30%
- Nordstrom declined -23%
On the other hand, some companies did see their stock prices appreciate during the summer.
- Biotech giant Amgen appreciated 17%
- Off-brand retailer TJ Maxx appreciated 10%
- Local uniform specialist Cintas appreciated 4%
Beyond Market News to
Economic Indicators
For the economy more generally, here a few key statistics.
| Housing Starts | -10.5% from June to August |
| Existing Home Sales | -7.4% from June to August |
| Total Non-Farm Payroll | +449,000 new jobs from June to August |
| Unemployment Rate | increased to 3.8% in August from 3.6% in June |
| Jobless Claims (4-week average) (September 21, 2023 report from June 22nd report) | declined to 217,000 from 255,750 |
| Retail Sales (headline adj.) (June 2023 to August 2023) | +1.02% or 4.1% annualized |
| Retail Sales (ex-gasoline adj.) (June 2023 to August 2023) | +0.66% or 2.64% annualized |
In short, the summer was a mixed bag for the economy. The employment situation remained decent. New jobs continue to be created; jobless claims fell a bit between June and August, and the unemployment rate ticked slightly higher. Retail sales remained strong, partially as a result of higher gasoline prices. High mortgage rates may be impacting housing, as existing home sales and the construction of new homes (housing starts) both fell between June and August.
Based solely upon mixed summertime data and market news, spotting a trend one way or the other is not readily apparent. Declines in primary housing data and in key retail stocks are concerning, but evidence of a more broad-based slowdown is lacking.
For more market news and insights from Schmitt Wealth Advisers, view Our Outlook blog. Want to start a conversation about your financial future? contact us.
This material is provided by Schmitt Wealth Advisers, LLC for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Opinions expressed by Schmitt Wealth Advisers are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Schmitt Wealth Advisers, however, cannot guarantee the accuracy or completeness of such information. Past performance may not be indicative of future results.
