Weekly Market Watch

Market Review: Not too hot, not too cold

Despite elevated longer-term bond yields, global markets ended last week on a positive note as equities rebounded from earlier losses. The S&P 500^® finished the week essentially flat, while developed international stocks underperformed. The “Goldilocks” September payrolls report was weaker than expected but remained stable, leading market expectations for a Federal Reserve (Fed) rate hike this month to decline. Remarks from Fed officials and U.S. Treasury operations contributed to lower yields for shorter-maturity bonds.

Crude oil prices moderated last week, aided by news that the Group of Seven nations planned to release emergency oil and diesel reserves over the next four months. This development comes amid persistent concerns about escalating U.S.-Iran tensions, with reports indicating the U.S. has deployed a third aircraft carrier and additional troops to the Middle East.

Market Outlook

Data released last week reinforced our view that the economy remains resilient and that underlying fundamentals remain solid. U.S. quarterly economic growth was revised higher, while inflation came in below expectations. Together with the latest jobs report, these data suggest there is little urgency for the Fed to implement an additional rate hike this year. We favor a diversified approach to portfolios as geopolitical developments, the upcoming U.S. midterm elections and rising global bond yields pose risks to the near-term outlook.

Chart of the Week

Percentage of S&P 500 members above their 200-day moving averages

Stock market breadth has narrowed after a broadening trend that had been in place since April.
The percentage of S&P 500 companies above their 200-day moving averages has fallen to its lowest level in the past year, as a higher-rate environment has contributed to more concentrated market leadership.
Despite the recent narrowing of market returns, earnings growth has broadened and we expect that trend to continue.

FOR AN IN-DEPTH LOOK

View Chart of the Week

Schedule an appointment

SCHEDULE NOW

Find a branch near you

FIND NOW

Important Legal Disclosures and Information

For definitions of indexes used in this publication, please refer to pnc.com/indexdefinitions.

The PNC Financial Services Group, Inc. (“PNC”) provides investment and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds through its subsidiary, PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and provides specific fiduciary and agency services through PNC Delaware Trust Company or PNC Ohio Trust Company. This report is furnished for the use of PNC and its clients and does not constitute the provision of investment advice to any person. It is not prepared with respect to the specific investment objectives, financial situation, or particular needs of any specific person. Use of this report is dependent upon the judgment and analysis applied by duly authorized investment personnel who consider a client’s individual account circumstances. Persons reading this report should consult with their PNC account representative regarding the appropriateness of investing in any securities or adopting any investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The information contained in this report was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy, timeliness, or completeness by PNC. The information contained in this report and the opinions expressed herein are subject to change without notice. Past performance is no guarantee of future results. Neither the information in this report nor any opinion expressed herein constitutes an offer to buy or sell, nor a recommendation to buy or sell, any security or financial instrument. Accounts managed by PNC and its affiliates may take positions from time to time in securities recommended and followed by PNC affiliates. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC does not provide services in any jurisdiction in which it is not authorized to conduct business. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Securities are not bank deposits, nor are they backed or guaranteed by PNC or any of its affiliates, and are not issued by, insured by, guaranteed by, or obligations of the FDIC or the Federal Reserve Board. Securities involve investment risks, including possible loss of principal.