Weekend Update, June 10th, 2024
Index, Sector & Asset Performance
The S&P 500 gained +1.3% last week, led by technology and health care stocks., The index closed just off a new record high, along with the Nasdaq. The S&P 500 is now up a bit over +12% in 2024. Energy and materials stocks lagged during the week. NVDA became the second largest stock in the S&P 500 last week as its shares price crossed $1200. This morning, the stock trades around $120/s as it completed its 10-for-1 stock split over the weekend.
Global also equities gained +1.1% last week. Global sector performance for the week and YTD (per Goldman Sachs Research):
Even with Friday’s spike in yields, interest rates fell last week with yields declining from -2 bps on short term Treasuries to -10 bps on longer maturities. Friday’s selloff ranged from +12 bps (30-year) to +17 bps (5 & 7-year) erasing much of the four-day rally into Friday’s data.
Economic Indicators and Earnings Commentary
On the surface, Friday’s jobs report was stronger than everyone expected, increasing by +272k payrolls. Remember these are not workers, since this survey double counts people holding more than one job. For a complete recap, and analysis of the jobs data please turn to this thorough article on ZeroHedge. Our team has often discussed the unreliable nature of government data.
This report also showed strength in wage growth running above 4%. Services ISM recovered earlier in the week. The markets returned to pushing out Fed rate cuts, pushing out expectations and the first full 25 bp Fed rate cut is now only priced in by December. However, historically, there is nothing predictive in these estimates and guesses by economists.
The CPI report is this Wednesday and the PPI report on Thursday. The June FOMC meeting is also this Wednesday. Powell’s post-meeting statement will be released at 2:00 PM ET, followed by a press conference at 2:30 PM.
Global Market Trends/Commodities/Currencies
Gold prices were strong last week on other Central Bank rate cuts.
The US dollar rallied late in the week on interest rate cut timing differentials throughout the world as the Bank of Canada became the second developed economy to cut rates in 2024.
OHFG Exclusive Data & Charts: Summer Rallies are the Norm, even during Elections
Here is a table on what historical total return an investor earned during a 3-month holding window in the 4th year of a Presidential election cycle. It also shows historic odds of a positive total return for every 3-month period. For example, an investor buys in May and sells the end of July. This table says that historically, 62.5% of the time, an investor made a positive 3-month holding period return and their average return was 2.03%, between May and July in the 4th year of a Presidential cycle.
Oak Harvest Weekly Stock Talk: What’s Going On: Are We Headed for a 70’s Style Crisis in 2025?
