There was a lot of news about the employment picture this week. Unemployment dipped below 5% in September to 4.8%. The expectation was for a 0.1% decrease from August to 5.1%.
Equity markets faced selling pressure on the week amid mounting risk factors. The S&P 500 was down 3.1% on the week. Small caps fared better with a drop of 2.6%, whereas the NASDAQ Composite was down 4.1% as rising rates scared the duration trade.
The S&P 500 Index was down 0.80% this week. There is concern supply chain issues may continue into next year leading to tighter margins. The spread of the Delta variant also contributed to downward pressure on the market this week.
Equity markets faced selling pressure on the week as Chinese real estate issues came front and center. The third Friday of September was again weak, which set-up a gap down on Monday.
Equity markets slipped lower in the past week as early morning strength was consistently sold. Recently the Dow Jones Industry Average was down six out of seven days, but the magnitude was tame with just a 2.4% decline.
The S&P 500 and NASDAQ finished near their all-time highs after a flat week. But once again, this masks weakness under the surface. The Russell 2000 Index of small caps fell 1.6%.
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Domestic equities moved higher on the week as small caps bounced, just as it looked like the trap door was opening. The S&P 500 tacked on 2.2%, but advances of 3.6% in the NASDAQ and 3.7% in the Russell 2000 helped cyclicals outpace defensives.
The second quarter earnings season approaches a close with 95% of S&P 500 companies having reported results. It was a strong quarter for companies. Earnings and sales are up 94.40% and 25.97% respectively.
Domestic equities moved higher on the week; this time led by small caps. The Russell 2000 advanced 2.5% versus the 1.1% gain in the S&P 500. The NASDAQ was the laggard with a fractional drop.