Wickham Financial & Insurance Services

09/01/2026

Recap of Last Week

• U.S. stock markets were generally higher
o S&P 500 and Nasdaq 100 gained about 0.5% each.
o Russell 2000 (small caps) declined 1.5%.
• Market sentiment improved due to:
o Lower long-term Treasury yields.
o Falling oil prices.
o Strong earnings results from Nvidia.
• Treasury market remained a key focus
o Treasury Department announced plans to increase purchases of longer-dated Treasuries after a sharp rise in long-term yields.
o The move sparked debate about whether government intervention is distorting important market signals.
• Fed Chair Kevin Warsh spoke at Jackson Hole
o Discussed market-based indicators he monitors, including credit spreads and AI-related pricing signals.
o Reaffirmed that the Fed Funds Rate remains the primary tool for controlling inflation.
o Noted inflation remains above desired levels.
• Rate hike expectations increased
o Markets raised the probability of a September Fed rate hike from 35% to 55%.
• Nvidia delivered exceptionally strong results
o Q2 revenue reached $96.2 billion, up 106% year-over-year.
o Guided Q3 revenue to approximately $104 billion.
o Helped ease concerns about slowing AI-related capital spending.

• Energy sector weakened
o U.S. Central Command reported the Strait of Hormuz was cleared of mines.
o Over 1,500 vessels carrying roughly 750 million barrels of crude oil successfully transited the region.
o Oil prices and refining margins declined.
o Energy sector fell about 1.5% for the week.
• Other asset classes
o U.S. Dollar strengthened on higher rate hike expectations.
o Gold pulled back from recent highs.
o Cryptocurrencies remained resilient following the previous week's strong rally.

Week Ahead

• Primary focus: August Employment Report (Friday)
o Expected payroll growth: +56,000 jobs.
o Unemployment rate expected to remain at 4.1%.
• Why it matters
o Employment is a key component of the Federal Reserve's dual mandate alongside inflation.
o Investors want to determine whether July's loss of 23,000 jobs was a temporary anomaly or an early sign of labor market weakness.
• Market implications
o A stronger-than-expected report could support expectations for a Fed rate hike.
o A weaker report could increase concerns about economic slowing and shift rate expectations lower.

Recap of Last Week• U.S. stock markets were generally highero S&...

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Market Recap (Last Week)

• Markets pulled back as rising long-term Treasury yields pressured stocks:
o S&P 500: -1.4%
o Nasdaq 100: -2.4%
o Russell 2000: -1.6%
• Bond market was the primary driver of market weakness after earnings season largely concluded.
• Treasury Secretary Scott Bessent announced plans to at least double purchases of longer-dated Treasuries to help reduce pressure on long-term interest rates.
• The strategy is not quantitative easing (QE) but rather an effort to stabilize long-term yields and manage government borrowing costs.
• Greater reliance on shorter-term Treasury issuance could lower interest expenses if the yield curve remains positively sloped.
• U.S. dollar weakened sharply, helping fuel gains in alternative assets.
• Gold continued its rally, benefiting from the weaker dollar and lower confidence in long-term government debt.
• Cryptocurrency was the standout winner:
o Bitcoin surged more than 22% for the week.
o Crypto-related assets rallied broadly.
o President Trump hosted a White House crypto summit and urged Senate passage of the CLARITY Act, with a procedural vote scheduled for September 15.
• Best performing S&P 500 sectors:
o Health Care: +4%+, boosted by positive cancer treatment developments from Moderna.
o Energy: +2.8%, supported by stronger oil prices, expiration of the 60-day ceasefire, and strong refining margins.

• Worst performing sector:
o Technology: -3.5%+, weighed down by higher interest rates.
• Trade tensions resurfaced:
o U.S.-Canada trade talks broke down.
o U.S. imposed 50% tariffs on approximately $20 billion of Canadian goods.
o Canada announced plans for dollar-for-dollar retaliation.
o Initial market reaction was muted given the broader $900+ billion trade relationship between the two countries.

Key Events to Watch This Week

• Wednesday: PCE Inflation Report
o Expected annualized rate: 3.7%
o Still above the Federal Reserve's 2% inflation target.
o Closely watched as the Fed's preferred inflation measure.
• Wednesday: Nvidia Earnings
o Considered one of the most important earnings reports due to Nvidia's central role in AI infrastructure spending and capital expenditures.
• Friday: Jackson Hole Symposium
o Fed Chair Warsh is expected to discuss monetary policy and his preference for a more market-driven approach rather than strict dependence on economic data.
• Geopolitical focus remains on Iran
o Although the 60-day ceasefire expired without immediate escalation, no new negotiations have been announced.
o The U.S. is increasing economic pressure, with Treasury Secretary Bessent describing upcoming measures as an "Economic D-Day."

Market Recap (Last Week)• Markets pulled back as rising long-term...

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Recap of Last Week

• U.S. stocks continued to rally, with the S&P 500 and Russell 2000 reaching new all-time highs for a second straight week.
• NASDAQ lagged slightly, remaining about 2% below its early June record high.
• 9 of 11 S&P 500 sectors advanced, while Materials and Consumer Discretionary underperformed.
• Energy led the market, rising 7.5% as crude oil surged 6.5% due to stalled Iran negotiations.
• Strong earnings season continued:
o 88% of S&P 500 companies have reported results.
o 86% beat earnings expectations.
o Q2 earnings are tracking roughly 50% higher than a year ago.
• AI investment story expanded:
o Nvidia CEO Jensen Huang reportedly secured preliminary agreements to raise $500 billion for additional AI infrastructure.
o This would add to the $700+ billion already expected from major hyperscalers, supporting bullish market sentiment.
• Inflation data was favorable:
o CPI rose just 0.1% month-over-month and 3.4% year-over-year.
o Producer prices were unchanged.
o Expectations for a September Fed rate hike fell to 35%, down from 55% the prior week and 80% in late July.
• Labor market remained stable, with jobless claims at 209,000.
• Treasury yields stayed elevated, with the 10-year Treasury ending the week at 4.68%.
• Other market indicators remained positive:
o Dollar stayed firm.
o Credit spreads remained tight.
o Market volatility continued declining.
• International markets also gained, led by emerging markets, reflecting a broader risk-on environment.
• Precious metals posted modest gains, while Bitcoin fell another 3%.

Week Ahead

• Key focus: Release of the July FOMC meeting minutes for clues about the Fed's stance before the September meeting.
• Investors will watch how close policymakers were to supporting a rate hike after three dissenters voted differently at the July meeting.
• Important economic data this week includes:
o U.S. housing reports
o U.S. manufacturing data
o Inflation data from Canada, the Eurozone, and Japan
o Japan GDP figures
o Employment reports from the U.K. and Australia
• Retail earnings dominate the calendar:
o Home Depot (Tuesday)
o Target, Lowe's, TJX (Wednesday)
o Walmart and Ross Stores (Thursday)
• Key market risks and catalysts:
o Oil prices
o Treasury yields
• A decline in either could provide additional support for stocks, while continued increases may make further market gains more difficult.

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