Weekend Update, October 14th, 2024
Index, Sector & Asset Performance
The S&P 500 closed the week at a new weekly all-time high close, on the back bullish of early initial bank and financial stock earnings including J.P. Morgan and Blackrock. The S&P 500 gained +1.13% on the week, led by an almost +5% rise in the bank group plus good gains in cyclically biased technology and industrials. The S&P 500 made its 45th all-time high in 2024 as earnings season kicked off with a bang in banking.
Outside of the US, the STOXX 600 and FTSE 100 rose and fell by -0.68% and –0.29%, respectively. Chinese stocks continued to retreat from their recent parabolic rise as the stimulus announcements are digested by investors. The Hang Seng index posted its biggest one-day decline since 2008, closing the week down -6.53%
Treasury bond yields rose with the 2-Year and 10-Year US Treasury yields rising to 3.94% and 4.07%, respectively.
Economic Indicators and Earnings Commentary
Last week’s CPI report came in a little higher than analysts’ expectations with headlines at +2.4% year to year for September slowing from August slightly. The 6-month trend is sitting higher than the Feds goal of 2%, printing +2.6% in September.
The U.S. annual deficit hit $1.8T In 2024, Neither Presidential candidate is signaling fiscal restraint if they are elected.
Retail sales will be reported and look to be slowing in front of the elections. Numerous Federal Reserve officials talk this week.
FOMC meeting minutes were released last week and indicated majority support for their decision to lower the Fed Funds rate by 50bp at the September meeting. Some members also stressed that the larger-than-expected rate cut should not be interpreted “as a signal that the pace of policy easing would be more rapid.
The stock markets shrugged off initial jobless claims in the US increasing by +258k last week, reflecting a +14k increase in hurricane-affected states and boosts from auto layoffs in Michigan.
Earnings reporting season accelerates with more banks and brokerages reporting (Citicorp C, Charles Schwab SCHW, Goldman Sachs GS, Bank America BAC as well as United Healthcare UNH, Abbott Labs ABT and Johnson and Johnson JNJ in the healthcare sector. In industrials, railroad company CSX and trucker J.B. Hunt report.
Global Market Trends/Commodities/Currencies
Crude prices rose last week on the conflict in the Middle East as Israel’s defense minister warned of a potential retaliation against Iran. WTI and Brent crude finished the week higher at $75.56 and $79.04/bbl, respectively, despite the Energy Information Agency reporting an increase in US crude oil stocks.
In the Gold markets, the price of an ounce rose for their fifth consecutive week of gains, ending at $2699.70/troy oz.
The U.S. dollar index (DXY) appreciated against most currencies last week, rising by +0.29%, as minutes from the FOMC’s September meeting and inflation prints cut expectations of additional outsized rate cuts in the near term.
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