Thanks to strong gains on Thursday and Friday, the Dow (+1.6%), NASDAQ (+2.2%) and S&P 500 (+1.8%) all finished the week with in positive territory. Meanwhile, taxable bonds and tax-free municipal bonds fell about 0.2% - 0.5%, as fears of inflation continued to persist.
Last Thursday, the markets exhibited their biggest gains since March 2021 due to a combination of strong economic data. Unemployment claims fell below 300,000 for the first time since March 2020, immediately prior to the onset of the pandemic and the associated lockdowns. Continuing jobless claims also showed its trend of going down ever since the supplemental unemployment payments were discontinued in early September. Then, the large bank stocks reported blockbuster earnings, spurring additional optimism regarding the economy. Further, the monthly Producer Price Index (PPI – a sign of inflation) gained a whopping 8.6% over last September, but was lower than August, giving economists hope that inflation has peaked and is on a downward trend. Personally, I don’t believe that one month of a decrease demonstrates a trend, so I will be very interested in seeing more downward values before drawing that same conclusion.
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