By Bill Hornbarger, Chief Investment Officer
Three Things to Watch
- Washington will be center stage again this week as lawmakers continue to debate a major infrastructure stimulus package (bipartisan infrastructure bill), social spending deal (Build Back Better Act), and address the debt ceiling. Despite uncertainty and rancor surrounding all three topics, the S&P 500 remains less than 4% from its record high closing level.
- Jobs and the employment situation will be the focus this week in terms of economic data. The ADP payroll report, weekly jobless claims, and the September employment report will all be released. Friday’s establishment report is expected to show 470,000 new jobs added and the unemployment report declining slightly to 5.1%. U.S. employment remains five million below the pre-pandemic peak although significant gains have been made and jobs remain plentiful.
- The third-quarter earnings season kicks off in earnest this week with reports from PepsiCo, Levi Strauss, and Constellation Brands. Investors will pay particular attention to comments on supply chain issues and what they might mean going forward.
Three Things to Know
- On Aug. 5, 2011, Standard & Poor’s gave the company’s first ever downgrade to U.S. sovereign debt, lowering the rating one notch to AA+ with a negative outlook. S&P cited a number of reasons including “the difficulties in bridging the gulf between the political parties over fiscal policy” and “political brinkmanship” as “the statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.” (Source: Standard & Poor’s, Wikipedia)
- Friday (Oct.8) marks the 10th anniversary of the passing of Apple co-founder Steve Jobs. Successor Tim Cook has overseen the company’s rise to a $2.4 trillion market cap in recent trading. (Source: CNBC, Bloomberg)
- Looking back to 1926, the worst rolling seven-year period for stocks was -6.1% per year and for bonds was +0.8% per year. Intermediate-term bonds have never had a seven-year period with negative returns. Stocks have been positive in 95% of all rolling seven-year periods in this time frame. (Source: A Wealth of Common Sense).
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.