Happy Friday, September 13th!
Markets reverse last week’s losses on tame inflation data and expectations for interest rate cuts. Delta, United and American Pilots honor 9/11 victims at Healing Field flag memorial. Hang Ten Hounds: Sugar rides again! Do you suffer from triskaidekaphobia?
#1 – Weekly Market Recap
Stock Markets rallied this week, reversing last week’s declines, with the S&P 500 and the Nasdaq both on pace for their best week since November 2023. Through Thursday’s close, the Nasdaq is up +5.4%, while the S&P 500 and the Dow Jones are up +3.4% and +1.9% respectively.
This week’s rally follows 4 consecutive days of declines to begin September. Investor concern over softening economic data last week was eased by this week’s tame consumer and producer inflation data.
Investors are now turning their attention to next week’s Federal Reserve meeting where the question is no longer whether there will be an interest rate cut, but rather how substantial the cut will be. Futures markets currently lean towards a 0.25% interest rate cut, but a 0.50% cut isn’t out of the question.
If the Federal Reserve cuts interest rates next week, it will join other central banks who have recently cut interest rates including the European Central Bank, the Bank of England, and the Swiss National Bank.
At DSG Capital Advisors, we continue to interpret the economic data as indicating that the U.S. economy is slowing and, as a result, the Federal Reserve will need to aggressively reduce interest rates over the next several quarters.
#2 – Inflation Insights
Consumer inflation eased to a three-year low in August with consumer prices rising +2.5% annually, down from +2.9% in July. Core consumer inflation, excluding food and energy, held steady at +3.2%, meeting economists’ expectations.
Producer price inflation continued to moderate in August, matching economists’ forecasts of 1.7% over the last year. Core producer inflation ticked up slightly to 2.4%.
August marks the fifth consecutive month of softening consumer and producer inflation. For a Federal Reserve that defines itself as “data dependent,” the five consecutive months of moderating inflation will hopefully be sufficient for the Federal Reserve to begin reducing interest rates at next week’s meeting.
While moderating inflation offers relief to households, the cooling labor market is a growing concern. Hiring has slowed, wage growth has softened, and unemployment durations have increased.
It seems clear that moderating inflation and softening labor market is a recipe for the Federal Reserve to cut interest rates at next week’s Federal Reserve meeting. Investors will be focused next week not only on the size of the anticipated first rate cut, but also any hints Chairman Powell provides about the pace and magnitude of future rate cuts.
#3 – 9/11 Healing Field
Each year since the terrorist attacks on September 11, 2001, Sandy City, Utah, has hosted the Healing Field® flag display to honor the nearly 3,000 lives lost that day. This powerful event, held on the Sandy City Promenade, brings together thousands of visitors who walk through the sea of American flags, each representing a life tragically cut short.
The display was first launched by the Colonial Flag Foundation (CFF), inspiring communities across the nation to hold similar events. Now, 23 years later, a new generation has emerged with no memory of 9/11, but the need for healing, unity, and patriotism remains. The Healing Field continues to foster a sense of community, reminding young and old alike of the sacrifices made on that fateful day.
Notable among the volunteers this year were pilots representing American Airlines, Delta, United and the Air Line Pilots Association, who helped install the flags and attach a name card describing each of the victims. The Healing Field is more than just a memorial; it’s a place of reflection and inspiration. For many, like the pilots who helped assemble the display, the memories of that day are deeply personal. This year, the event once again stands as a powerful symbol of hope, unity, and remembrance.
Source:KSL
Source:HealingField.org
#4 – Surf's Up!
This week dozens of dogs competed in the 19th annual dog surf competition at the Del Mar Dog Beach in California. The Helen Woodward Animal Center hosts the event, and it is the longest-running dog surfing event in the U.S. Each year, the event raises funds for orphaned pets.
The canine “SurFURs” performance is judged based on the “length of their ride, wave technique, enthusiasm and confidence on the board,” according to the animal center in a press release. This year’s winners competed based on size (extra small to extra-large), freestyle, and best in surf. Sugar was again on the winner’s block this year taking first place in the small and freestyle categories.
In addition to the surfing competition, the event included an Americana-themed costume contest, a Peeps and Pups ride, and many vendors with tasty treats for everyone’s furry friends.
Source:AnimalCenter.org
#5 – Triskaidekaphobia
While the fear of Friday the 13th being bad luck has been around for centuries, no one really knows how these two are related. However, there are several theories…
The most popular theory originates with the trials of the Knights of Templar. On Friday, October 13, 1307, thousands of people who belonged to the group the Knights Templar, were arrested under orders of King Philip IV of France. Many were executed and burned at the stake. The leader of the Knights Templar cursed those who had condemned him, and many believe he put a hex on Friday the 13th before he died.
Another theory is that the superstition has religious origins. On the day before his death, Jesus attended the Last Supper with his 12 disciples. Judas was believed to be the thirteenth guest at the table. His betrayal led to Jesus’ crucifixion, on a Friday.
Then in 1907, American businessman Thomas Lawson published a book called Friday the Thirteenth, a crime novel about a stockbroker who chooses this day to deliberately crash the stock market. A year later, The New York Times became one of the first media outlets to acknowledge the superstitions of Friday the 13th. Later in the 1980s, the popularity of the “Friday the 13th” movie franchise added to the cultural phenomenon.
There is at least one Friday the 13th every year, but it can happen up to three times a year. In 2024, there will be one more in December. Whether you suffer from triskaidekaphobia (fear of the number 13) or not, we wish you good luck this weekend!
Source: History.com
Have a great weekend!
Denver and the DSG Capital Advisors Team