Rover’s Weekly Market Brief – 09/01/2023

Guru Portfolios

We’ve updated our Guru Portfolios! You can see a full list of all our portfolios here ^[1] and download the latest updates from the Stock Rover Library ^[2].

Economy

The U.S Bureau of Labor Statistics Job Openings and Labor Turnover Survey, or JOLTS reported 8.827 million job openings ^[3] as of the last day of July, 338,000 lower than June’s 9.165 million reading. The job openings rate fell to 5.3% from 5.5% in June. July’s reading was the lowest since March 2021. Industries contributing to the decrease included professional and business services (-198,000); health care and social assistance (-130,000); state and local government, excluding education (-67,000); state and local government education (-62,000); and federal government (-27,000). Job openings increased in information (+101,000) and in transportation, warehousing, and utilities (+75,000). The number of people who voluntarily left their jobs decreased (-253,000) to 3.549 million. The number of people who quit their jobs for other opportunities made up 2.3% of the workforce in July, little changed from the previous month. Quits decreased in accommodation and food services (-166,000); wholesale trade (-27,000); and arts, entertainment, and recreation (-17,000). The number of hires decreased slightly (-167,000) to 5.773 million in July. The hiring rate decreased by 0.1% to 3.7%. There were 1.5 available jobs for each unemployed person in July, down from 1.6 in June.

The Bureau of Economic Analysis’ second estimate on second-quarter gross domestic product (GDP) growth reported ^[4] an economy expanding at a seasonally adjusted annual growth rate of 2.1% down from the first estimate of 2.4%, but slight above the 2.0% pace set in the first quarter. Private inventories were revised down, showing a decline at a (-$1.8B) pace instead of increasing at the previously reported (+$9.3B) pace. Inventories were a negative to GDP growth instead of adding 0.14 percentage points per the first estimate. There were also downward revisions to business spending on equipment (from +10.8% to +7.7%) and intellectual products (from +3.9% to +2.2%). Consumer spending which accounts for over two-thirds of the U.S. economy was revised up slightly (from +1.6% to +1.7%), but it is still down significantly from the (+4.2%) for Q1 of 2023. The PCE price index, which is one of the main measures of inflation and consumer spending, increased at a (+2.5%) annual rate, down from the (+4.1%) pace in the first quarter.

The Bureau of Economic Analysis reported the Personal Consumption Expenditures (PCE) price index increased 3.3% ^[5] from July 2022, as compared to readings of (+3.0%), (+3.8%), (+4.3%) and (+4.3%) over the previous months. Although above the 3.0% pace set the previous month, it is well below the 40-year high of 6.98% set in June 2022. The PCE is watched closely by the Fed as it portends future inflation. On a monthly basis, the headline number showed a (+0.2%) increase, as compared to (+0.2%), (+0.1%), (+0.3%), and (+0.1%) over the previous months. Consumer spending increased (+0.8%) in July as personal consumption expenditures increased $144.6B. The $144.6B increase reflected increases of $102.7B in spending for services and $41.9B in spending for goods. The PCE price index increased (+0.2%) in July, as prices for goods decreased (-0.3%) and prices for services increased (+0.4%). Food prices increased (+0.2%) and energy prices increased (+0.1%). The closely watched core PCE index, which strips out the more volatile factors of food and energy continued on a somewhat level trajectory with a year over year (+4.2%) increase, this follows readings of (+4.1%), (+4.5%), (+4.6%), and (+4.6%) over the previous months.

Upcoming Economic Reports:

Tuesday September 5 – Factory Orders (MoM) (July)

Wednesday September 6 – Services PMI (August)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
United Corp (UNC.TO)	HealthEquity (HQY)	American Eagle Outfitters (AEO)	DocuSign (DOCU)	Hooker Furnishings (HOFT)
BYD (BYDDF)	Zscaler (ZS)	C3.ai (AI)	Toro (TTC)	Kroger (KR)