Investment Week at a Glance
Stocks finished mixed last week. The Dow Jones Industrial Average was down 0.9%, while the S&P 500 was flat, and the NASDAQ was up 0.9%. Foreign stocks (MSCI EAFE) were down 1.7% for the week. Bond prices were down for the week, with the 10-year U.S. Treasury yield ending the week at 5.28%. (Data source: Wall Street Journal)
US Economy Adds Just 29,000 Jobs In September, Unemployment Rate Jumps to 4.2%
The Bureau of Labor Statistics released the US economy’s preliminary job data for September on Friday, October 2nd. The initial reading showed a cooling labor market as the entire economy only added 29,000 jobs in the month against an estimated 90,000 from economists. The unemployment rate also jumped to 4.2%, up 0.1% from August. This data significantly decreased the odds of another rate hike at the next FOMC meeting and suggests that the US labor market is starting to show signs of weakness.
September Inflation Data Reports Release Next Week
On October 14th and 15th, the Bureau of Labor Statistics will release the Consumer Price Index (CPI) and the Producer Price Index (PPI) for September. These two inflation metrics will indicate whether inflation in the economy is cooling down or accelerating in the US economy from both a consumer and producer perspective. The inflation data may provide the public with insights into the effectiveness of the Federal Reserve’s rate hike last month, as well as the effects of monetary policy on the US economy.
Lam Research Corporation Stock Up 87% in 2026, 510% Since October of 2021
Lam Research Corporation (LRCX), one of the fastest-growing semiconductor equipment manufacturers, has seen its stock price soar by more than 500% over the last five years as revenue continues to grow significantly. On July 29th, Lam Research reported earnings per share of $1.82 for the quarter, beating analyst estimates by 8% (LRCX Investor Relations). The company is set to have its next earnings report on October 21st, and analysts are expecting a record-setting quarter for both revenue and earnings per share (CNBC).
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Quiz
Which asset is generally considered a hedge during periods of economic uncertainty?
(Scroll Down for Answer)
- Gold
- Stocks
- Bonds
- Cryptocurrencies
Answer:
- During extended periods of economic uncertainty, gold has historically been an asset class investors have flocked to because of its low correlation with stocks and bonds. Cryptocurrencies tend to perform poorly in economic downturns or periods of volatility as they are generally considered speculative alternative assets. For example, in 2022, the S&P500 fell by over 18%, long-term bond prices fell by roughly 30%, Bitcoin fell by over 64%, and gold ended up 0.4% for the year.
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