Equity Markets Advanced Last Week

Equity markets enjoyed a solid week of gains following a rough start to the month. Each of the major benchmark indexes advanced, with the exception of the Russell 2000, which is generally the most volatile of the aforementioned indexes. Eight of the 11 S&P 500 market sectors closed the week ahead, led by materials and utilities. Only health care, financials and energy declined. Signs of cooling inflationary pressures likely fueled expectations that the Federal Reserve may cut interest rates again this year. Gold prices hit a record high earlier in the week, only to pull back later. Crude oil prices fell below $70.00 per barrel.

GDP Grew 3.0% in the Second Quarter

Gross domestic product (GDP) rose 3.0% in the second quarter, according to the third and final estimate from the Bureau of Economic Analysis. Personal consumption expenditures, the largest contributor to over all GDP, rose 1.90%. The personal consumption expenditures (PCE) price index increased 2.5% (3.4% in the first quarter). Excluding food and energy prices, the PCE price index increased 2.8% (3.7% in the first quarter).

Eye on the Week Ahead

October kicks off with the release of the September employment figures. Job gains have slowed notably over the past few months, which contributed to the cut in interest rates by the Fed. It appears that the Fed is nearing its goals of maximum employment and 2.0% inflation.