Last Week’s Summary
- S&P 500 Index rose 0.63%
- International Equities rose 0.33%
- Emerging Markets rose 1.00%
- U.S. 10-Year Treasury Yield rose to 4.25%
- Initial Jobless Claims fell to 238k
- Leading Index rose to -0.5%
What to Watch for This Week
- T, 6/25/24 Chicago Fed Nat Activity Index, Conf. Board Consumer Confidence
- W, 6/26/24 New Home Sales, MBA Mortgage Applications
- Th, 6/27/24 Initial Jobless Claims, GDP, Core PCE Price Index
- F, 6/28/24 Personal Income/Spending, PCE, Core PCE, U. of Mich. Sentiment
Weekly Market Recap
Approximately $5.5 trillion expired on Friday during the quarterly event known as “triple witching,” when derivatives contracts tied to equities, index options, and futures mature. This forces traders to either roll over their existing positions or establish new ones enmasse. This quarter, Nvidia Corp. is playing a significant role.
The value of contracts tied to Nvidia set to expire on Friday is the second largest of any underlying asset, trailing only the benchmark gauge. The ongoing AI frenzy, which recently made Nvidia the world’s most valuable company, also drove record inflows into tech funds, with about $8.7 billion flowing into tech funds in the week through June 19.
While the S&P 500 has set 31 new records this year, few members outside the technology sector have participated in this advance.
Over the last three months, the 10 largest stocks in the Index by market capitalization – mostly tech giants – have significantly outperformed the rest. This caused many investors to query about concentration risks and what alternatives are available to offset said risks. Despite data indicating economic softening, Treasuries fell after coming close to erasing this year’s losses.
Federal Reserve Bank of Minneapolis President Neel Kashkari stated that the central bank is committed to returning inflation to 2%, estimating it will take about a year or two to achieve this goal. Next week, the Core PCE (Personal Consumption Expenditures) Index will be closely watched as it may provide insight into the Federal Reserve’s timing for its first pivotal move.
Download Market Snapshot June 24, 2024
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