The S&P 500 Index returned -1.68% last week, with all four days in the shortened holiday week posting declines. Including the previous Friday, the index has marked five consecutive losing days after hitting an all-time closing high of 4,536.95 the previous Thursday. Equity markets have followed an upward trend most of the year with the S&P 500 Index currently sitting on a 19.91% return year-to-date. The August non-farm payroll data that was released the previous Friday showed an increase of 235K jobs which was well under the expectations of 733K. While leisure and hospitality had strong job gains in the previous two months, hiring in the industry appeared to be flat for the month of August with some attributing that to increased concerns over the spread of the Covid-19 Delta variant.
Treasury yields were little changed last week in a relatively quiet week of economic data. The Job Openings and Labor Turnover Survey released Wednesday by the Labor Department showed U.S. job openings reached a record 10.9 million in July. Initial jobless claims for the week ending on September 4 reached a pandemic low of 310,000. The four-week moving average of 339,500 was also a pandemic low, indicating there has not been a rise in layoffs due to the Delta variant. The Producer Price Index increased 0.7% from July to August, and 8.3% from last year. Both increases were above forecasts. August’s year-over-year increase in producer prices is the largest on record. Labor and materials shortages and supply chain bottlenecks contributed to the price increases. Regarding inflation, the CEO of Union Pacific said in an interview last week that “it doesn’t look like it’s temporary,” and that cargo congestion will likely continue well into next year. August’s reading of the Consumer Price Index will be released this week.