Earnings End

Last week, U.S. markets were mixed. Most indexes were higher with the DJIA -0.11%, S&P 500 +0.95% and NASDAQ Composite +1.74%. The last two indices closed at record highs, which DJIA did the week before. The NASDAQ was the last of the 3 major US indexes to reclaim its all-time highs from early 2022. This is due to the much larger decline it sustained in 2022 versus both the S&P 500 and a portfolio of slower growth, less volatile, dividend growth stocks.

On Sunday, Congress unveiled a bill to fund key parts of the government through the rest of the fiscal year that began in October.  This should avert a partial shutdown of the Federal Government.  The deadline for a new deal is this Friday. The legislation sets a discretionary spending level of $1.66 trillion for fiscal 2024.

The Japanese Nikkei index crossed over the 40,000 (+198 pts or 0.5%) for the first time ever.

China’s 14th National People’s Congress gathers over the next two days, with Premier Li Qiang tabling the official Government Work Report on the second day without a press briefing. This will be the first time a premier has not taken Q&A since 1993. Details of the report were released last week. China’s emphasis was on “prudent monetary policy”, “proactive fiscal policy”, and the creation of “new productive forces”.

For those investors worried about the upcoming November Presidential election, our team has discussed historic paths of the market in election years.  We will continue to provide updates on this topic throughout 2024 but here is a new chart from Goldman Sachs highlighting the normal path of short term stock volatility, as measured by the VIX Index, into and after elections versus non-election years.

 

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Oak Harvest Weekly Stock Talk: AI Stock “Bubble” update, https://youtu.be/DDijWrGGE40