U.S. Stocks closed higher on Friday, September 8th, 2023, after some late buying into the close.
In another volatile session that swung from negative to positive twice during the day, investors grapple with the state of economy in the light of potential actions by the Federal Reserve.
The U.S. services sector outperformed expectations in August, while the jobless claims came in lower than expected.
Initial unemployment claims decreased by 13,000 to 216,000 in the week ending September 2nd, according to Labor Department data released on Thursday.
Additionally, there were new cuts in oil production and data confirming a slowdown in China and Eurozone.
When considering the data and events from last week, it appears that inflation may still pose a problem.
For the week, the Dow was down 0.8%, closing at 34,577, the S&P 500 was down 1.3%, closing at 4,457, and the Nasdaq Composite fell 1.9%, closing at 13,761.
Here are the closing levels on Friday, September 8th, 2023:
It was another volatile week, albeit shorter due to the Labour Day holiday on Monday.
The bias last week was to drift lower, following the strong performance from the week before.
The lack of follow-through buying suggests that the market may not be convinced that the Fed is finished with rate cuts for now and that further cuts may be on the horizon.
Strong inflationary data has raised doubts in the minds of investors, and there is a risk that inflation may become a concern in the last quarter of the year.
While the dip buyers, FOMO (Fear of Missing Out), and the AI frenzy are still present, the recent trading pattern suggests that these strong buying pressures may not be as prominent as in recent times.
Once again, we have broken below the 50-day moving average, and this could indicate that we are entering a phase of range trading around this technical level, making it difficult to predict the future direction.
However, the failure to sustain above the 50-day moving average, after convincingly breaking through it last week, could be a sign of more weakness to ahead.
For now, it is advisable to be prepared for continued volatility as the most prudent assumption.
Source: CBOE, Bloomberg
This commentary is written by James Gomes, a seasoned finance industry veteran with extensive experience of over 30 years, including a substantial tenure at a reputable U.S. bank exceeding 20 years.
Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance. Investments in certain services should be made on margin or leverage, where relatively small movements in trading prices may have a disproportionately large impact on the client’s investment and the client should therefore be prepared to suffer significant losses when using such trading facilities.
Please ensure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with Doo Prime’s trading platforms. You should seek independent professional advice if you do not understand any of the risks disclosed by us herein or any risk associated with the trade and investment of financial instruments. Please refer to Doo Prime’s Client Agreement and Risk Disclosure Statement to learn more.
This information is addressed to the general public solely for information purposes and should not be taken as investment advice, recommendation, offer, or solicitation to buy or sell any financial instrument. The information displayed herein has been prepared without any reference or consideration to any particular recipient’s investment objectives or financial situation. Any references to the past performance of a financial instrument, index, or a packaged investment product shall not be taken as a reliable indicator of its future performance. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners, and their respective employees, as well as managers, make no representation or warranties to the information displayed and Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners and their respective employees, as well as managers, shall not be liable for any direct, indirect, special or consequential loss or damages incurred a result of any inaccuracies or incompleteness of the information provided. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners, and their respective employees, as well as managers, shall not be liable for any direct, indirect, special, or consequential loss or damages incurred as a result of any direct or indirect trading risks, profit, or loss arising from any individual’s or client’s investment.