Last Week’s Summary
- S&P 500 Index rose 1.39%
- International Equities rose 1.02%
- Emerging Markets rose 2.26%
- U.S. 10-Year Treasury Yield rose to 3.78%
- Initial Jobless Claims fell to 219k
- FOMC cut rates by 50bps
- Empire Manufacturing rose to 11.5
- Industrial Production rose to 0.8%
- Leading Index rose to -0.2%
What to Watch for This Week
- M, 9/23/24 S&P Global US Manufacturing PMI
- T, 9/24/24 Conf. Board Consumer Confidence
- W, 9/25/24 New Home Sales, MBA Mortgage Application
- Th, 9/26/24 Initial Jobless Claims, GDP, Durable Goods Orders
- F, 9/27/24 Personal Income, Personal Spending, U. of Mich. Sentiment, U. of Mich 1-Yr. Inflation
Weekly Market Recap
A rally in U.S. stocks lost momentum as the initial excitement over the Federal Reserve’s half-point interest rate cut waned, while expiring derivatives contracts and a major rebalancing amplified Friday’s market swings.
After fluctuating between gains and losses in the final minutes of trading, the S&P 500 and Nasdaq 100 both closed down 0.2%, despite the broader Index hitting its 39th record high of 2024 earlier.
The Dow Jones Industrial Average, however, managed a modest 0.1% gain, enough to set a new closing record. Friday’s “triple witching” event-when approximately $5.1 trillion in derivatives contracts tied to stocks, index options, and futures expired-coincided with an additional $250 billion in index trades, causing sharp price fluctuations as traders repositioned.
This quarterly event is notorious for sudden market moves as investors adjusts their portfolios. Optimism is growing that the Federal Reserve will manage a soft landing for the economy, with policymakers signaling another half-point cut later this year.
Markets are now pricing in further easing and projecting 18% earnings growth for the S&P 500 by the end of 2025. Investors will get fresh data on PMI, GDP, and the Fed’s preferred inflation gauge, PCE, next week.
60-Second Breakdown:
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
