Weekend Update, October 28th, 2024
Index, Sector & Asset Performance
U.S. stock futures are pointing to gains of 0.6% at the open ahead of earnings reports by several big tech companies this week. WTI oil prices tanked -6% in the overnight to below $68 a barrel as Israel’s strike against Iran did not disrupt oil supplies.
Stocks had a choppy week, recovered some early-week losses, were set to deliver another all-time high close, but sold off late in Friday session on leaked news of a weekend Israel attack on Iran military positions. Quarter to date, the market is net positive on earnings. Consumer discretionary stocks were led by Tesla (+22% on Thursday) achieving its largest daily gain since 2013. This move helped propel the NASDAQ Composite above its July highs making it the leading index on the week. The interest rate sensitive Russell 2000 led losing indexes at near -3%.
Stocks outside the U.S. underperformed as the U.S. dollar strengthened.
Yields rose last week, as the economic data came in ok and the Presidential election betting markets jumped to favoring a DJT win. Economic data has caused markets to cut back rate cut expectations to 91 bps of cuts in 2025. The 10-year tested 4.25% midweek before ending at 4.24%. This up over +50 bps since the Fed cut rates on September 18, however in line with 4th quarter tendencies for yields to rise on better growth prospects.
Economic Indicators and Earnings Commentary
The economic data highlight this week is August GDP out on Thursday.
A gift from above as no Fed speakers are public this week due to the blackout period ahead of the policy meeting.
On the earnings front this week, the floodgates open for the major tech names in the S&P500. Quarterly results from AMZN, GOOGL, META and MSFT hit the tape mid-week. We also get reports from other major companies, including COP, XOM, CAT, DHI, F, CMCSA, MCD, SBUX, AMGN, PFE, LLY, V, and MC, in the biggest week of 3Q24 earnings season.
Global Market Trends/Commodities/Currencies
Stocks in Asia were mostly higher this morning with gains in Japan, China, and India. Japan’s Nikkei 225 gained almost +2% following election results.
Oil prices rose modestly last week, regaining the $70/bbl, but tanked over the weekend on the Israel/Iran news. National average gasoline prices is down to $3.14/gal, the lowest since February. Energy prices continue to be influenced to growth data in China and developments in the Middle East.
In the Gold markets, the price of an ounce pulled back from recent highs on the back of a stronger UD dollar.
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