Top Headlines
- Tech & Emerging Markets Lead
- Housing Stimulated
- Labor Softens as Fed Cuts Rates
Equity Performance
Markets moved higher across the board, as the S&P 500 posted its best September month in 15 years, gaining 3.7%. In what has historically been the worst month for stocks, every major index posted gains, led by emerging markets, which increased by 7.2%. September’s broad-based gains reflect improved investor confidence, as the Fed cut interest rates for the first time this year.
Sector performance was split in September, with Technology leading the way, bouncing back from a negative August, advancing over 7.5%. Consumer Staples, Materials, and Energy all went negative, with Financials virtually flat at 0.1% in September.
Economic Data
The U.S. labor market continued to weaken as the unemployment rate ticked up to 4.3%, and just 22,000 jobs were added to the economy, missing expectations for the fourth month straight. The Fed Funds Rate was cut by 25 basis points, an anticipated move that sparked early signs of stimulation in the housing market. US New Single-Family Home Sales spiked up 20.48% as mortgage rates declined, leaving the 30-year at 6.3% to end September.
Employment
The unemployment rate ticked up once again to 4.3%, as did the labor force participation rate for the first time in five months, up to 62.3%. As of the latest available August nonfarm payrolls report, just 22,000 jobs were added to the U.S. economy. This falls below the modest Dow Jones estimate of 75,000, marking the fourth consecutive month of missed expectations, as the labor market continues to slow down.
Consumers and Inflation
The US inflation rate rose to 2.92% in August, as did core inflation to 3.11%. The US Consumer Price Index rose 0.4% MoM, and US Personal Spending ticked up by 0.62%.
At the September 17th FOMC meeting, the Federal Reserve cut its key Fed Funds Rate target range by 25 basis points to 4.00%-4.25%. Fed Chair Powell pointed to a “shift in the balance of risks” and forecasted two more cuts in 2025. The FedWatch tool now assumes over a 96% chance that the first of these will come when the FOMC meets on October 29th.
Production and Sales
The US ISM Manufacturing PMI increased 0.7 points in August to 48.7, just its second increase of the year. The Services PMI jumped by 1.9 points between July and August to 52.0, its largest gain since December 2024. The YoY US Producer Price Index decreased to 2.6%, as US Retail and Food Services Sales increased slightly MoM, sitting at 0.63% growth for August.
Housing
While US New Single-Family Home Sales spiked drastically by 20.48% in August, Existing Home Sales decreased by 0.25% MoM. The Median Sales Price of Existing Homes fell for the second month in a row by 0.73%, with prices sitting at $422,600. Mortgage rates declined throughout September; the 15-year Mortgage Rate was 5.49% as of September 25th, while the 30-year closed the month at 6.30%.
Commodities
The price of gold increased by 12% to new all-time highs in September, leaving SPDR Gold Shares ETF (GLD) at $355.42 per share. Oil prices increased slightly, with Brent crude up 1.72% for the month to $69 per barrel. WTI was flat, decreasing by 0.14% to $64.27.
Cryptocurrencies
Major cryptocurrencies posted another mixed month. Ethereum cooled down slightly, dropping 3.6%, following a three-month period in which it gained over 73%. Bitcoin increased by 5.1% to $114,309.20 per coin.
Fixed Income Performance
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