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Market Recap
WEEK OF AUG. 14 THROUGH AUG. 18, 2023
The S&P 500 index fell 2.1% last week, extending the market benchmark's losing streak to a third consecutive week as bond yields climbed to highs not seen in years. The U.S. benchmark ended Friday's session at 4,369.71, down from last Friday's closing level of 4,464.05. The index is now down 4.8% for the month of August, but is still solidly in positive territory for 2023 with a year-to-date climb of 14%.
This week's drop came as Treasury yields rose to multi-year highs; the 10-year Treasury yield hit a 16-year high and the 30-year Treasury yield reached a 12-year high, making stocks look less attractive.
Investors are also concerned about interest rate policy. Minutes released this week from the latest Federal Open Market Committee meeting indicated most committee members saw "significant upside risks" to inflation, which could prompt the central bank to further raise its benchmark lending rate.
All of the S&P 500's sectors fell this week, led by a 4.1% drop in consumer discretionary, a 3.2% slide in real estate and a 2.8% loss in financials. The smallest decline was posted by the technology sector, which slipped 0.8%.
Tesla shares (TSLA) led the consumer discretionary sector's drop, falling 11% on the week as reports said the electric vehicle maker reduced the prices for its premium Model S and Model X vehicles in China, its second price cut in the country this week. The company also launched two cheaper versions of its Model S sedan and Model X sports utility vehicle in the US.
In real estate, shares of Boston Properties (BXP) fell 7.1% as Argus downgraded its investment rating on the workplace manager's stock to hold from buy. Also among the sector's decliners, shares of Kimco Realty (KIM) shed 6.3% as Goldman Sachs downgraded its investment rating on the shopping center operator's stock to neutral from buy.
Among the decliners in the financial sector, shares of Discover Financial Services (DFS) shed 9.9%. Morgan Stanley cut its price target on the digital banking and payment services company's stock to $100 per share from $107 while keeping its investment rating at equalweight.
This week, earnings reports are expected from companies including Lowe's (LOW), Medtronic (MDT), NVIDIA (NVDA) and Intuit (INTU).
Economic data will feature July existing home sales on Tuesday, followed by July new home sales on Wednesday, along with readings from Standard & Poor's on the services and manufacturing sectors for August. July durable goods orders are anticipated on Thursday, followed by consumer sentiment data for August on Friday.
