The week’s macroeconomic landscape was shaped by a notable decline in U.S. housing starts, which fell to 1.350 million from the prior 1.427 million, signaling weaker demand and potential headwinds for economic growth. This drop—down 4.8% month-over-month—mirrors broader concerns about consumer spending and housing sector weakness, particularly for stocks like homebuilders and retailers BEA Housing Starts.
Key Economic Releases
- Empire State Manufacturing Index plummeted from 15.6 to 10.6, signaling weaker regional manufacturing activity and potential capex cuts FEDERAL RESERVE.
- Export Price Index fell by -0.6% MoM, hinting at softer global demand and potential pressure on exporters BLS Export Price Index.
- TIC Net Long-Term Transactions remained stable at 232.7 billion, sustaining institutional bullish pressure CFTC TIC Data.
Market Movers
The VIX surged to 15.19, reflecting heightened risk sentiment amid mixed economic data. Gains were seen in tech and biotech stocks like Cerebras Systems (CBRS) and argenx SE (ARGX), while Enovix (ENVX) and Cue Biopharma (CUE) dropped sharply on earnings concerns. The broader market sentiment remains greed-driven at 59/100 Stock Fear & Greed Index.
Central Bank Watch
- The Fed’s September meeting probabilities favor a 3.50–3.75% rate cut (65%), though October and December risks persist with cuts to 4.00–4.25% at 41.3% and 19.6% respectively FedWatch Tool.
- Yields rose modestly: 10-year Treasury yield at 4.73% (+0.127%), while 2-year yields dipped slightly (-0.004%), signaling mixed inflation expectations FRED Yields.
What to Watch Next Week
- September 10: Labcorp Investor Day (potential earnings guidance for biotech sector).
- September 16: FOMC meeting (rate decision and policy outlook).
- August 19: Walmart (WMT) earnings (EPS estimate: $0.74), Home Depot (HD) earnings (EPS: $4.61).
The week’s data underscores a fragile economic backdrop—housing weakness, manufacturing slowdowns, and Fed watchfulness—all pointing to cautious optimism ahead.