Last Week’s Summary
- S&P 500 Index rose 3.99%
- International Equities rose 3.71%
- Emerging Markets rose 2.91%
- U.S. 10-Year Treasury Yield fell to 3.88%
- PPI fell to 2.2%; Core fell 2.4%
- CPI fell to 2.9%; Core fell to 3.2%
- Initial Jobless Claims fell to 227k
- U. of Mich. Sentiment rose to 67.8
What to Watch for This Week
- M, 8/19/24 Leading Index
- W, 8/21/24 MBA Mortgage Applications, FOMC Meeting Minutes
- Th, 8/22/24 Initial Jobless Claims, S&P Global US Manufacturing PMI, Existing Home Sales, Continuing Claims
- F, 8/23/24 New Home Sales, Jackson Hole Symposium
Weekly Market Recap
A wave of data highlighting the resilience of the U.S. economy spurred the best week of the year for stocks, as dip buyers capitalized on the recent downturn. Equities surged on Friday, with the S&P 500 extending its seven-day rally to a 6.8% gain – the best streak since October 2022.
Wall Street’s “fear gauge,” the VIX, fell below 15, while 10-Year Treasury Yields dipped three basis points to 3.88%. Gold surpassed $2,500 amid hopes that the Fed is moving closer to cutting rates. With just a week until Jerome Powell’s speech in Jackson Hole, Wyoming, traders are eagerly awaiting signals from the Federal Reserve chief on future policy direction.
The stock market broke a four-week losing streak driven partly by fears that the Fed wouldn’t reduce borrowing costs quickly enough to avoid a deeper economic slowdown. This week’s data, showing cooling inflation and strong consumer spending, rekindled hopes for a soft landing.
The swap market’s pricing has stabilized, now implying around 30 basis points of easing next month and about 93 basis points by year’s end – a significant pullback from the 150 basis points of cuts anticipated for 2024 earlier this month.
90-Second Breakdown
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
Download Market Snapshot August 19, 2024
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