Market Watch: Homebuilder Confidence Dips, Fed Holds Rates, Government Shutdown Looms, Jobs Report Impresses, and Potential Hollywood Writers Strike Resolution

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Market Watch: Homebuilder Confidence Dips, Fed Holds Rates, Government Shutdown Looms, Jobs Report Impresses, and Potential Hollywood Writers Strike Resolution

SPY
S&P 500

Last Week: -2.92%
YTD: 13.81%
1 Year: 16.85%

DIA

Dow Jones Industrial Average

Last Week: -1.90%
YTD: 4.04%
1 Year: 15.27%

ONEQ
NASDAQ

Last Week: -3.54%
YTD: 27.58%
1 Year: 20.92%

Russell 2000
Month: -3.78%
YTD:
1.98%
1 Year:
4.76%
Large Growth

YTD: 34.94%
1 Year: 23.40%

*As of 8/31/2023

Large Value

YTD: 6.59%
1 Year: 13.25%

*As of 8/31/2023

Homebuilders

US homebuilders are feeling down on their business for the first time in seven months due to the high mortgage rates. Builder confidence in single-family housing fell 5 points in September. This follows a 6-point drop in August. The average rate on a 30-year fixed mortgage has been over 7% since June. Builders have created more incentives for buyers by cutting prices. In the most recent survey, 42% of new single-family home buyers were first-time buyers. Historically, the average is closer to 27%.

The Fed

The Federal Reserve voted to hold interest rates for September. Fed Chair Jerome Powell indicated they will likely keep rates higher for longer than they originally anticipated. Inflation has been very sticky, and last week’s inflation numbers came in higher than expected, largely due to gas prices spiking. The Fed will meet again at the end of October to discuss another rate hike.

Shutdown Looms

The government will run out of funding after September 30th. The GOP lawmakers made progress last weekend towards averting a government shutdown; however, the resolution was pulled on Tuesday without going to a vote, citing a lack of party support. The resolution would have enacted a near 8% cut to discretionary spending and increased border protections – both of which were top priorities for conservatives. Disagreements between the parties and within the GOP may lead them to a shutdown.

Jobs

Initial jobless claims came in at 201,000, well below the forecasted 225,000. It is the lowest level since January. This is good news for the economy but could be a sign of continued trouble for inflation.

Writers

Hollywood writers initiated a stop in early May. They are looking to improve wages, working conditions, and health and pension benefits. After the 150-day work strike, it appears the writers and the studios have reached a tentative agreement.
  • Alex Wolfe

    Alex is a Certified Financial Planner™. He brings nearly a decade of experience working with individuals, families, and business owners. Prior to working for Base Wealth Management, Alex worked for Fidelity Investments and an independent wealth management firm in Venice, FL. Through many years of practice, he specializes in helping clients navigate their financial goals through comprehensive financial planning. He received his bachelor’s degree in economics from Texas A&M University.

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