Last Week’s Summary
- S&P 500 Index rose 0.87%
- International Equities fell 0.26%
- Emerging Markets fell 0.37%
- U.S. 10-Year Treasury Yield fell to 4.08%
- Initial Jobless Claims fell to 241k
- Retail Sales rose to 0.4%
- Empire Manufacturing fell to -11.9
- MBA Mortgage Applications fell to -17.0%
What to Watch for This Week
- M, 10/21/24 Leading Index
- T, 10/22/24 Richmond Fed Manufact. Index
- W, 10/23/24 MBA Mortgage Applications, Existing Home Sales
- Th, 10/24/24 Initial Jobless Claims, S&P Global US Manufacturing PMI, New Home Sales
- F, 10/25/24 Durable Goods Orders, U. of Mich. Sentiment, U. of Mich. 1-Yr Inflation
Weekly Market Recap
Wall Street traders navigated a wave of corporate earnings reports and signs of resilience in the world’s largest economy, driving stocks to their longest weekly winning streak of 2024. The S&P 500 rose 0.4%, marking its 47th record high this year, while the Nasdaq 100 climbed 0.7%.
The Dow Jones Industrial Average remained mostly flat, and the Russell 2000, which tracks smaller firms, lagged on Friday but still posted a nearly 2% gain for the week. This marked the S&P 500’s sixth consecutive weekly rise.
Even the index’s equal-weighted version hit a record high, signaling optimism that the rally could broaden. Netflix Inc. surged 11% following strong earnings, while Apple Inc. gained 1.2% on robust sales of its new iPhones in China. On the downside, American Express Co. dropped 3.2% after lowering its revenue forecast.
The bulk of the earnings growth in the S&P 500 continues to come from mega-cap stocks, with the “Magnificent Seven” expected to report an 18% increase in third-quarter profits, meanwhile, other companies are projected to show a modest 1.8% rise in earnings, though growth is expected to accelerate to double digits by the first quarter of 2025.
Despite the S&P 500’s record-breaking performance throughout the year, investor sentiment has remained cautious due to uncertainties around the Federal Reserve, geopolitics, and the upcoming U.S. elections.
However, this week brought a resurgence of optimism, albeit with some caution as it signaled a potential downside for stocks.
60-Second Breakdown:
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.