Last Week’s Summary
- S&P 500 Index rose 0.27%
- International Equities rose 0.44%
- Emerging Markets fell 0.05%
- U.S. 10-Year Treasury Yield rose to 3.90%
- Leading Index fell to -0.6%
- MBA Mortgage Applications rose to -10.1%
- Initial Jobless Claims rose to 232k
- S&P Global US Manu. PMI fell to 48
What to Watch for This Week
- M, 9/2/24 LABOR DAY
- T, 9/3/24 S&P Global US Manu. PMI, ISM Manufacturing
- W, 9/4/24 MBA Mortgage Applications, Trade Balance, Factor Orders, Durable Goods Orders
- Th, 9/5/24 Initial Jobless Claims, ADP Employment Change, ISM Services Index
- F, 9/6/24 Change in Nonfarm Payrolls, Unemployment Rate
Weekly Market Recap
In the final days of a tumultuous August, stocks surged, with traders on edge as they entered September, historically the worst month for equities. Despite the recent volatility in global markets, the S&P 500 closed just shy of its all-time high.
In the last 10 minutes of Wall Street trading, equities rallied, pushing the S&P 500 up 1% as all major sectors advanced. This marks the Index’s fourth consecutive monthly gain, buoyed by data indicating the economy’s resilience and raising hopes that the Federal Reserve might begin cutting interest rates in September.
While the possibility of a larger rate cut remains uncertain, next week’s jobs report could offer further insights. Since 1950, the S&P 500 has averaged a 0.7% loss in September and has risen only 43% of the time, making it the worst month for stocks in terms of average return and positive outcomes.
Meanwhile, Wall Street’s “fear gauge,” the VIX, dropped to 15, a sharp decline from its spike above 65 during the August 5 market selloff. In the bond market, 10-Year Treasury Yields increased by five basis points to 3.91%.
Friday’s U.S. consumer sentiment report revealed an improvement in for the first time in five months, driven by slower inflation and the expectation of Fed rate cuts, which boosted optimism about personal finances.
Fed Chair Jerome Powell signaled last week that the time had come to reduce the central bank’s key policy rate, reinforcing expectations that officials will begin lowering borrowing costs next month. Swap contracts now fully price in a quarter-point rate cut, with about 20% odds of a half-point cut, as forecast by at least two major U.S. banks.
60-Second Breakdown: September 3, 2024
Michael C. Sasaki, CFA®, discusses recent market performance and explains this week’s chart. Watch out.
