S&P 500 (SPY) Report – 08/30/23

Good morning traders!

The S&P 500 ($SPY) is trading slightly above yesterday’s close. Let’s get into it… 

Stock futures inched higher on Wednesday, potentially extending Wall Street’s three-day winning streak. This follows Tuesday’s release of unsatisfactory consumer confidence numbers and a larger-than-expected decline in U.S. job openings for July. This response reflects a “bad news is good news” scenario, particularly concerning interest rates and Fed policy. Despite recent gains, the three key indexes are on track for August losses with just a couple of trading days remaining. The Nasdaq Composite might conclude August with a 2.8% drop, while the Dow and S&P 500 are set for declines of around 2%.

Today, revised government data revealed that the annualized GDP growth rate for the April-June period was 2.1%, down from the initial 2.4%, reflecting adjustments due to lower inventory investment and business spending. Despite five Fed rate hikes since March 2022, the economy has outpaced the non-inflationary growth target of 1.8% set by officials. While concerns of higher borrowing costs persist due to the resilient economy, the prospect of a “soft landing” gains traction with slowing inflation. The labor market, although slowing, retains its hold on workers, driving wage growth and consumer spending. 

Furthermore, traders are processing the ADP report indicating that private employers added 177,000 jobs in August. This number is significantly lower than the revised count of 371,000 jobs in July and also falls below the Dow Jones estimate of 200,000. Interestingly, for the second consecutive day, investors appear to interpret weaker-than-expected economic data positively for stocks.

WednesdayEconomic Events:
MBA Mortgage Applications 7:00am ET
ADP Employment Report 8:15am ET – High Volatility Expected
GDP 8:30am ET – High Volatility Expected
Int. Trade in Goods 8:30am ET
Corporate Profits 8:30am ET
Wholesale Inventories 8:30am ET
Pending Home Sales 10:00am ET – High Volatility Expected
EIA Petroleum Report 10:30am ET – High Volatility Expected

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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