- The Federal Reserve expects to keep the federal funds target rate near zero through 2023
- Snowflake finished its first day of trading with a market capitalization of more than $70 billion
- U.S. retail sales increased a seasonally-adjusted 0.6% in August from the previous month
Top Three Market Headlines
The Fed Confirms Accommodative Stance: Last week the Federal Reserve confirmed it would continue to provide strong support to the American economy. Specifically, the Fed pledged that the federal funds target rate range―which is currently 0 to 1/4 percent―will likely stay unchanged until the labor market has reached “maximum employment” and inflation “is on track to moderately exceed 2% for some time.” The latter target, adopted recently by the central bank, represents a slightly more tolerant stance towards inflation. The Fed’s commitment to low rates was reflected in its updated chart of the expected path of interest rates―the so-called “dot plot”―which indicated that the Fed expects the federal funds target rate range to remain unchanged through 2023.
Busy Week for IPO Issuance: Last week marked the busiest week for initial-public-offering (IPO) issuances since Uber’s IPO in May 2019, with 12 offerings in total over the five-day stretch from September 14th through the 18th. Headlining the activity was cloud software company Snowflake, which more than doubled in price and finished with a valuation of over $70 billion by the end of its first day of trading on Wednesday, making it the biggest debut for a software company ever. Other notable IPOs included software companies JFrog & Unity Software, real estate investment trust Broadstone Net Lease, and telehealth firm AmWell.
Retail Sales Continue Growing in August: U.S. retail sales increased in August at a seasonally-adjusted rate of 0.6% from the previous month and 2.6% over the prior year, the Commerce Department reported last Wednesday. This marked the fourth straight month of sales growth as the economy continues recovering from the Covid-19-induced business shutdowns that suppressed consumer activity in March and April. Further, August’s advance, fueled primarily by spending on home computers, new cars, and online groceries, occurred despite the expiration at the end of July of $600-a-week supplemental unemployment benefits, an encouraging sign of consumers’ ability and willingness to spend.