MARKET RECAP

US stocks fell by 3.5% for the week and were down by 3.73% for August. International stocks dropped by 4.49% and bonds took a 3.04% hit. Oil dropped by 9.20% and the dollar increased by 1.68% for the month.

Stocks are currently selling at 17.4x 2022 estimates for the S&P 500 and 16.1x 2023 numbers. The 2023 numbers peaked on about June 17 and have declined by about 3.33% since then. Much less than what was expected, but there is probably more to come.

Employment increased by 315,000 jobs in August, down from 526,000 in July. The increase is still considered a solid absolute number but indicates some cooling in the job market. The unemployment rose to 3.7%, up from 3.5%, as more workers entered the labor force. Those seeking work are now at 62.4% compared to 62.1% in July. Average hourly earnings were 5.2% higher than one year ago, consistent with the prior month. And month over month, the increase was 0.3%.

The Group of Seven agreed to an oil price cap for Russian oil, and in turn, Russia suspended natural-gas flows to Europe, although they blamed the stoppage on repairs. The oil price cap relies effectively relies on insurance to enforce its terms. In order to get insurance, buyers would have to observe the price limit. Almost all insurance for these types of shipments runs through G7 countries.

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