The Economy Loses Some Momentum as Investors Face Further Disruption


Stocks endured another week of choppy trading last week, full of down days followed by up days. In total, the S&P 500® index was down 2.5 percent. This followed its 2.3 percent decline of the previous week. From its peak on September 2 the index is now lower by 6.7 percent. It is no secret that the tech sector has suffered the worst of the declines, falling 11.1 percent since the index’s peak. Communications services and energy have been battered as well, tumbling 8.2 and 7.4 percent respectively. As has been noted before, cyclical groups have fared relatively better, but no group is positive. Materials are down only 1.8 percent and industrials are down just 2.9. Utilities and financials have also held up relatively well. The Nasdaq composite has fared even worse than the S&P 500. It fell 4.1 percent last week, after falling 3.3 percent the week prior. From its September 2 peak, the index is lower by 10 percent, and the Nasdaq 100 is down 10.7 percent.

Investors Grapple with the Unknowns During What Should be a ‘Season of Renewal’

The passage of Labor Day typically begins a season of renewal. We feel a sense of anticipation and rising energy as the languid days of summer are replaced by the brisk days of fall. School is back in session, with all of the promise of a new year, full of learning and growth. And the workforce returns to a full complement, with renewed focus, as vacations come to an end. 

The Fed’s Change in Monetary Policy is Important for a Sustainable Recovery

At the Kansas City Fed’s annual monetary policy symposium, held virtually last week, Fed Chair Powell announced a significant shift in the future conduct of monetary policy. The changes could have a meaningful impact on the pace of the economic recovery and the price of financial assets.