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Pre-Market Indexes Keep September Down

Friday, September 17, 2021

It appears as if we’re clocking a down week in the markets, with futures once again in the red ahead of the opening bell. We wouldn’t call this anything like a major sell-off, however — it’s more of a price-booking/fear-gauging nibble at the edges of the market. The Dow is currently -45 points, the Nasdaq is -10 and the S&P 500 -5 points. We entered September at or near record highs; September has taken care of that for now.

In fairness, it’s a tough time to gauge market sentiment, as we are between earnings seasons (the most recent providing the best year-over-year comps in recent memory, which is not expected to continue) and without yet an infrastructure bill on the way to passing through Congress. Thus, it’s something of a holding pattern until we at least get the rumor of solid results coming down the pike, and we’re just not there yet.

We have had a strong week of economic prints hitting the tape, with many — Empire State, Philly Fed, Imports and Retail Sales — having easily outperformed expectations. That they haven’t really moved the markets much at all tells us much of this good news had already been priced-in weeks ago, back when we were riding new closing highs seemingly every day.

After the opening bell today, we get our monthly University of Michigan Consumer Sentiment survey. Analysts are looking for a slight rebound in September, from an August headline which was this index’s worst in more than a decade. Today, we’re looking for a 72.0 read, up from 70.3 the previous month. However, these numbers pale compared to the 80+ figures we were seeing from March through July of this year.

Last month, the expectations gauge fairly collapsed — from 79.0 to 65.1 — based on fears of the Delta variant crimping the U.S. economy, inflation perhaps sticking around longer than the Fed had been anticipating, and wage growth slowing slowing somewhat. Hopefully, we can bounce back stronger than current analyst consensus — this would be in-line with the better-than-expected results we’ve seen in other economic metrics reported this week.

Next week, still a couple weeks removed from the heavy stream of incoming Q3 earnings reports, we will receive considerable data on the housing market, from Housing Starts and Building Permits to Existing and New Home Sales, all for August. The next meeting of the Federal Open Market Committee (FOMC) commences Tuesday, with Fed Chair Jay Powell’s address Wednesday afternoon. Will he finally chart out a timeline for tapering asset repurchases, based on the strengthening economy?

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