State of the Stock Market Analysis for the Week Ending September 10, 2017 (A Long Week On Wall Street 9-10-17)
It was a long week on Wall Street as investors had to factor in three hurricanes. a big earthquake in Mexico, and a hacking breach at Equifax (EFX) that apparently released the personal data of 143 million customers. What else could go wrong? The stock market shrugged it all off, though, and we saw weekly losses for the major indices of 0.9% for the Dow, 1.2% for the Nasdaq and 0.6% for the S&P 500. One would think the stock market might have crashed this week, but it refused to buckle. The latest good news is that Hurricane Irma is tracking west, and that is a big positive as we head into this weekend.
We are all of a sudden becoming weather and hurricane experts, and the wild thing about hurricanes is that for having 185 mile per hour winds, the actual storm really only advances in the ocean and toward land at around 14 or so miles per hour. It makes one wonder what we did 50 or 100 ago before all of the high-tech satellite information streamed into our homes all day long. Hopefully Irma will keep drifting west, so our thoughts and prayers are with Florida residents.
Some economists have darkly noted that the “rebuilding effort” is actually a good economic sign for the communities of Florida, Texas and the Caribbean, but that is not what we should be focused on right now. Hurricane Jose is next in line, so we will see what happens with that. It is great to see people working together and taking good care of each other. We all know now what “storm surges” are as opposed to Harvey’s 50 inches of flat out rain, so like it or not, we are all high-level meteorologists now.
As for the stock market and the economy, they are holding up well. Last Friday’s government jobs number was 156,000 new jobs for August, which was below expectations of 170,000 and below July’s 189,000. However, the stock market took it in stride. The unemployment rate ticked up to 4.4% from the previous month’s 4.3%, but again, the stock market was unfazed by the increase. It is very encouraging to see an aging bull market hold its ground so well.
The economic news for the rest of September will remain key to market direction, and then we have earnings season kicking off in October. Politically, it looks like the “debt ceiling” will be raised, and that takes one more of those big issues off the table. The DC drama about Russia in the past election is advancing, and while that provides political drama, investors remain unconcerned. Ten-year U.S. Treasuries are seeing big buyers right now, though, showing that we have a combination of a robust stock market and a move toward “safety,” which is a strange combination.
This should make for an interesting September, as once again, there is no clear catalyst for stock market direction. We had a lackluster week for stocks, but the market is still holding up extremely well given all of the “wild cards” floating around. That said, the Gorilla wishes each and all a relaxing weekend, especially our friends in Florida. We will be back in action on Monday, so have a great weekend. Some great college football is in play this weekend, so enjoy!
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