2023 | September 18

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The Market

Stocks Flat

The major U.S. stock indexes were little changed for the week, trading in a fairly narrow range. That’s in keeping with the market’s mostly flat profile over the summer; the gap between the S&P 500’s peak and low points since late June has been less than 5%.

The main benchmark of U.S. inflation climbed at its fastest pace since mid-2022, as the Consumer Price Index rose at an annual rate of 3.7% in August and 0.6% on a month-to-month basis. Higher energy prices fueled much of the increase; excluding energy and food prices, core inflation rose at a more modest 0.3% on a month-to-month basis.

An index that tracks investors’ expectations of short-term U.S. equity market volatility fell on Thursday to the lowest since late 2019, before the pandemic triggered a spike in the CBOE Volatility Index (VIX). Although the so-called VIX edged upward on Friday, it was still down about 36% year to date.         

The price of U.S. crude oil climbed for the third week in a row and eclipsed $90 per barrel on Thursday for the first time since last November. The price has climbed around 14% over the past three weeks amid renewed oil supply concerns.

The European Central Bank on Thursday again lifted interest rates in an effort to help address high inflation, marking the tenth policy meeting in a row at which has hiked rates. The latest move left the bank’s key rates at the highest levels since 1999.

Concerns about the potential for further interest-rate increases continued to weigh on prices of U.S. government bonds, and the yield of the 2-year U.S. Treasury climbed back above 5.00% level that it had breached in late August. The yield of the 10-year Treasury rose on Friday to around 4.33%, near its year-to-date high set in August.

After a recent negative trend for Chinese economic data, new figures released Friday on factory output and retail sales moved in a positive direction. Both metrics grew at a faster pace in August than they had in the previous month, with industrial output up 4.5% on a year-over-year basis and retail sales up 4.6%. 

The U.S. Federal Reserve is widely expected to leave its benchmark interest rate unchanged at its two-day policy meeting that’s scheduled to end on Wednesday. At its most recent meeting in late July, the Fed approved an increase of a quarter-percentage point to a range between 5.25% and 5.50%—the 11th hike since March 2022.

Source: John Hancock Investment Management

Excell Conference

And The Winners Are...

The 33rd First Annual Ig Nobel Prize ceremony honored 10 winners for conducting research into improbable ideas that make people laugh and, also, make them think. The awards “celebrate the unusual, honor the imaginative – and spur people’s interest in science, medicine, and technology.” The official mascot of the Ig Nobel Prize is “The Stinker,” a graphic of The Thinker toppled onto its back. This year, the winning research included:

• Augmented Gustation Using Electricity won the Nutrition Prize. In a shocking bit of research, Professor Homei Miyashita and Associate Professor Hiromi Nakamura explored flavor and electrification. They explained, “Electric taste is the sensation elicited upon stimulating the tongue with electric current…Our method involves changing the taste of foods and drinks by using electric taste. First, we propose a system to drink beverages using straws that are connected to an electric circuit. Second, we propose a system to eat foods using a fork or chopsticks connected to an electric circuit.”

• The The The The Induction Of Jamais Vu In The Laboratory: Word Alienation And Semantic Satiation received the Literature Prize. Fans of Ted Lasso are familiar with semantic sensation – when repetition causes a word to lose meaning. Chris Moulin, Nicole Bell, Merita Turunen, Arina Baharin, and Akira O’Connor, “…sought to document that the subjective experience of jamais vu can be produced in word alienation tasks, hypothesizing that déjà vu and jamais vu are similar experiential memory phenomena.” They had study participants write the same word over and over and over again, and documented the results.

• Eating Fossils won the Chemistry and Geology Prize. In The Paleontology Association Newsletter No. 96, Professor Jan Zalasiewicz discussed why scientists lick rocks. “Wetting the surface allows fossil and mineral textures to stand out sharply, rather than being lost in the blur of intersecting micro-reflections and micro-refractions that come out of a dry surface…The taste, now, was likely merely registered as generically-slightly-dusty and then instantly forgotten; I had always thought it entirely superfluous to identification. But perhaps not so…”

The winners received Zimbabwean 10-trillion-dollar notes. (Relics from a period of hyperinflation in Zimbabwe.) Ig Nobel recipients’ 24/7 lectures, which include a complete technical description delivered in 24 seconds and a concise summary that anyone can understand in just seven words, are available on the Improbable Research website.

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