Labor Day has passed, and with it the unofficial end to summer. But the U.S. stock market hasn't budged much.
The S&P 500 is basically unchanged from where it was much of July, even after this benchmark index just capped two straight weeks of gains and a wild August. And though it hit a series of all-time highs this year, this index is up only 3.5% from the same time last year.
The ongoing trade spat between the U.S. and China, along with worries that another recession is coming, have kept investors from pushing stock prices much higher. Last week brought good and bad news: Leaders of the two countries plan to resume trade talks in October, but economic data — from manufacturing to hiring — has weakened, pointing to a possible further slowdown in growth.
This week brings a slew of closely watched economic reports, including inflation and retail sales. Economists currently project no major change in prices during August for either consumers or companies, though they do forecast that retail sales slowed.
One anomaly amid signs of an economic slowdown? Small business owners, who have remained optimistic. This week, traders will get to see if sentiment among this group has shifted at all. And a new publicly traded company, SmileDirectClub, will debut. Others are expected over the rest of this month.
Here's how the news could affect your bottom line:
What's happening: A monthly report that measures confidence among small business owners in August is scheduled to be released on Tuesday by the National Federation of Independent Business. This survey looks at 10 different components, like whether business owners plan to hire or spend more money, and how they feel about the economy.
Why it matters: Businesses with fewer than 500 workers account for almost half of private sector employment, so traders closely monitor how these business owners feel. Recent reports have shown that business owners have remained optimistic so far. Any change in sentiment might confirm Wall Street's concerns about an economic slowdown.
What it means for you: Some economic reports may not seem to impact you directly — home sales, consumer spending, and manufacturing activity, for example — but they reveal important clues about the overall health of the U.S. economy. And hiring plans are especially important after last month's broader jobs report showed the employers added fewer jobs than economists expected in August, and fewer than in July. If employers pull back on adding workers to their payrolls, that may make it more difficult for job seekers to find a new position.
Even so, there could be weakness in any given month for these economic reports, which is why Wall Street is more focused on overall trends and a more prolonged shift in sentiment or activity. And despite all the recession worries, the next downturn is at least a year out, according to a majority of economists.
What's happening: It's been a busy year for IPOs, or initial public offerings, with companies like Uber, Lyft, and Beyond Meat coming to stock exchanges. After a slow summer, this week resumes the dash to public markets, with SmileDirectClub, a teeth-straightening service, expected to debut on Friday.
Other companies expected to go public this month include WeWork and Peloton.
Why it matters: Popular consumer companies can create a lot excitement both on Wall Street and off. But this year's debuts have had mixed results. Uber and Lyft have been big losers for investors, with both trading near all-time lows. And WeWork has slashed its valuation because of weaker-than-expected demand for its stock.
What it means for you: There have been some runaway successes with IPOs this year — Beyond Meat shares have more-than doubled since its debut in May — but those are largely exceptions. Experts caution that investing in IPOs can be risky: A recent UBS analysis based on data from a University of Florida professor found that most investments in newly public companies lose investors money after five years.
Still, it can be fascinating to watch the early days of these newly public companies because it can be a way to learn how professional investors value stocks.
Whether it happens this week or in the weeks ahead, there's likely to be some market bumpiness surrounding the Federal Reserve's meeting next week, when traders broadly expect central bankers will cut interest rates for the second time this year.
But perspective is important when investing: Just look at how the S&P 500 has fared in recent months as opposed to over a 12-month period. And remember that, while September historically is the weakest month of the year, that can actually be a good opportunity for long-term investors to buy stocks at lower prices.
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