Weekly Market & Economic News Recap (Week of September 18, 2023)

• Big tech weighs on stock market after Fed pause. Wall Street is finally buckling in for a longer ride with higher borrowing costs. (Wall Street Journal, September 20, 2023, https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-09-20-2023-1e30c85?mod=stocks_news_article_pos5)

• The Fed’s dream of a soft landing is facing a triple threat. The combination of the auto strike, a government shutdown and the restart of student loan payments will crimp growth as we head into the end of the year. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-21/autoworkers-strike-government-shutdown-threaten-soft-landing?srnd=null)

• Treasuries rebounded and stocks struggled at the end of a jittery week that saw investors positioning for a higher-for-longer Federal Reserve stance. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-21/stock-market-today-dow-s-p-live-updates--?srnd=null)

• US jobless claims fall to 201,000, lowest level since January. Applications for unemployment benefits near half-century low. Continuing claims dropped to the lowest since start of 2023. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-21/us-jobless-claims-fall-to-201-000-lowest-level-since-january?srnd=null)

• Sales of previously owned US homes declined in August to the lowest since the start of the year, restrained by limited inventory and historically high mortgage rates. Contract closings decreased 0.7% from a month earlier to a 4.04 million annualized pace, National Association of Realtors data showed Thursday. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-21/us-existing-home-sales-fall-to-seven-month-low-on-rates-supply?srnd=null)

• Emerging-market stocks set to erase 2023 gains. Fed’s hawkish signals raise stakes for global central banks. China’s woes form backdrop for second monthly selloff. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-21/emerging-market-stocks-set-to-erase-2023-gains-on-rate-jitters?srnd=null)

• Another yield high as US 10-year jumps above key 4.5% level in post-fed bond rout. Bloomberg Treasury benchmark has dropped 1.2% this year. Bill Gross says bond investors face third year of losses. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-22/another-yield-high-as-us-10-year-jumps-above-key-4-5-level-in-post-fed-rout?srnd=null)

• Treasury buyback plan will boost market resilience, US debt official says. Department has said buyback programs will begin in 2024. Buybacks will seek to aid liquidity, improve cash management. (Bloomberg, September 21, 2023, https://www.bloomberg.com/news/articles/2023-09-21/treasury-s-frost-says-buyback-plan-will-boost-market-resilience?srnd=null)

• S&P 500 drops for third straight week. Rising Treasury yields weigh on stocks. (Wall Street Journal, September 22, 2023, https://www.wsj.com/finance/stocks/customurl-global-stocks-markets-dow-news-09-22-2023-6e7fb73e?mod=stocks_news_article_pos2)

• Banks fearing a liquidity crunch pay more to cling to cash. Banks are paying up to protect their cash holdings from sinking further and to safeguard against future runs on deposits, according to Bank of America Corp. Large time deposits have risen $675 billion since June 2022. (Bloomberg, September 22, 2023, https://www.bloomberg.com/news/articles/2023-09-22/banks-fearing-a-liquidity-crunch-pay-more-to-cling-to-cash?srnd=null)

• Fed’s Collins says rates may need to stay higher for longer. Boston Fed chief says further tightening ‘not off the table’. Expects businesses, households to become more rate-sensitive. (Bloomberg, September 22, 2023, https://www.bloomberg.com/news/articles/2023-09-22/fed-s-collins-says-rates-may-need-to-stay-higher-for-longer?srnd=null)

• After overseeing the most aggressive monetary tightening cycle in decades, several central banks, including the US Federal Reserve and Bank of England, took a pause this week. (Bloomberg, September 23, 2023, https://www.bloomberg.com/news/newsletters/2023-09-23/bloomberg-weekend-reading-fed-s-triumph-may-be-undone-by-government-shutdown?srnd=economics-v2)