The FCMS Investment Committee is pleased to share the latest insights on the current financial market and economic developments.

Market Perspectives

Here are the top things from our FCMS Investment Committee on current financial markets and economic developments:

1. 1. Equities End Summer Trading on Positive Note, Small-Cap and Tech Sectors Lead the Way

      Equities had a rough August with difficult trading, but they recovered last week and ended summer trading on a positive note. The decline in interest rates was helpful, with bond prices setting the tone for the equity markets. The small-cap and tech-heavy NASDAQ 100 sectors led the way in the US, while international stocks trailed slightly as the dollar approached its highest level of the year. Crude oil also had a significant increase, rising over 7% and settling at its highest level since November of last year.

   2. Labor Market Data Shows Positive Signs for Inflation Control

      Recent labor market data released last week brought positive news for the Federal Reserve’s efforts to tackle inflation. Job growth has slowed while labor supply has increased and labor demand has cooled off. These developments are good for a healthier labor market and for better balancing the inflation picture. However, long-term bond yields rose last week, while shorter-term yields fell significantly. This confusing price action indicates that bond yields have two-way risks as trading desks resume activity after the summer lull.

   3. ISM Services Report and Fed Speech to Watch in Trading Week Ahead

      Looking at the trading week ahead, no significant market events are taking place. However, we can expect to see the ISM Services report on Wednesday and a speech from John Williams on Thursday, an important member of the Fed’s leadership. As investors search for the next market shift, we will be paying more attention to positioning and flow data. It’s possible that we could see continued volatility in equities, particularly since September has historically been the worst month for stocks.

What Happened Last Week?

Here is a recap of the top things that happened last week:

• Equities had a recovery week as yield movements influenced prices.
• Last week’s labor market data brought good news for inflation and boosted market sentiment.
• The price of crude oil has risen to over $85 per barrel, the highest it has been since last November.

What We’re Watching This Week

Here is a recap of what we’re watching for this week:

• This week’s trading period is brief, with no major market triggers.
• This week’s important events include the ISM Services report on Wednesday and a speech by a prominent Federal Reserve official on Thursday.
• The movement of bond prices has become a key focus following a period of erratic and unclear activity over the past few weeks.Signs of exhaustion to recent trends are causing price action in the AI, mega-cap tech trade, and US equities.

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