The holiday shortened trading week began in the same lackluster, sideways trading configuration that we’ve seen over the last couple of weeks. However, this all changed on Friday.
Prior to the Friday open, North Korea conducted its fifth and largest nuclear test. This caused overnight weakness, especially in the overseas markets.
However, Friday’s news wasn’t limited to concerns about North Korea. Boston Fed President Eric Rosengren stated in remarks to the South Shore Chamber of Commerce in Quincy, Massachusetts, “If we want to ensure that we remain at full employment, gradual tightening is likely to be appropriate…” and “A reasonable case can be made for continuing to pursue a gradual normalization of monetary policy,”
These comments by a voting FOMC member shocked the markets further, causing market sentiment to drastically turn lower as uncertainly rose around a potential rate increase later this month or this year.
The major markets ended mostly lower while the emerging markets were one of the few place of gains on the week.
All the S&P 500 sectors ended deep in the red with the exception of the Energy sector, which was the only positive sector on the week.
After a rough week, last week, Energy commodities rebounded some as the S&P Crude Oil Index gained 3.23% for the week. This was in spite of the continued increase in the Baker Hughes Rig Count which has shown a steady increase of rigs coming back online since last year’s low.
Finally, this weekend’s 15th anniversary of the September 11 attacks on our country gives us pause as we look back on how much our country has changed since that tragic morning. As we go forward, especially in an election year, we hope that you will look back at the time immediately after the terrorist attacks and remember how our country was unified for a time. Hold onto that in the midst of this polarization during this election season.