Weekly Newsletter 10/18/24
Good afternoon,
Wishing everyone, what I hope can be, a relaxing and fun filled weekend. I say hope because I know many of you are recovering from the mental, physical and financial strain of storms, health issues, and other stresses of life.
The S&P 500 is on track for a sixth straight week of gains with U.S. equities trading mostly higher today. Big tech is outperforming. Auto parts another bright spot on better-than-feared results from a major supplier. Industrial metals helped by latest bounce in China stimulus sentiment and precious metals also better. Financials a laggard with banks giving back some gains and credit cards hit by a major credit card company’s guidance. Staples also underperforming and drug stores weak on a major pharmacy guide. Treasuries firmer with the curve steepening, meaning longer term rates are continuing to rise…more about this in a moment.
Interesting to see how emotions tend to go hand-in-hand with market performance. The S&P 500 notched its 46th All Time High (ATH) of 2024 on Monday. The S&P now up ~23% ytd, marking best performance at this point in the year since 1997. Follows fifth straight week of gains for Dow, S&P and Nasdaq. Biggest tailwind as of late has been soft-/no-landing traction. In addition, while Fed easing expectations have been dialed back and inflation data have come in hotter, broader disinflation trend still supportive of the recent pivot to a rate cut cycle. Despite blackout window, buybacks remain strong and continue to track above seasonal levels. Despite elevated sentiment and select positioning readings, also talk about crowded positioning in downside hedges (US election uncertainty mentioned as a driver) that has helped to keep pain trade to the upside. Inflow trends seem to fit with some of the FOMO (fear of missing out) related to positive macro surprise momentum as last week saw largest inflows to equities in three months.
September housing starts came in a bit ahead of consensus while permits were light of expectations. This information followed some mixed housing data after a slight uptick in homebuilder sentiment, but a big weekly decline in mortgage applications. I believe the persistently high mortgage rates are mostly to blame for the decline in mortgage apps. The mortgage market is priced and most influenced by the 10-year treasury rate. All the recent rate discussion, rate cuts, economic “soft landing” debate, inflation, etc. has focused short-term rates. The Fed can only do so much about long term rates. Even with all the government and agency meddling and influence, “the market” still dictates much of what goes on despite the best efforts of the “smartest people in the room.”
September retail sales up 0.4% m/m against forecasts for 0.3-0.4% and August's 0.1% pace. Up 1.7% y/y. Retail sales ex autos up 0.5% m/m vs 0.1% consensus pace and August's upwardly revised 0.2% (was 0.1%). It was the strongest reading since June. The release noted solid gains for miscellaneous store retailers, clothing stores, health/personal care, and food/drinking places, with notable declines for electronics/appliances and furniture.
The link below contains additional financial information.
https://www.raymondjames.com/evangelista/resources
“Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful.” --Samuel Johnson
Thank you,
Kyle
KYLE CHRISTIANSON, CFP®
Financial Advisor
Raymond James & Associates, Inc.
1421 Pine Ridge Rd, Ste 300
Naples, FL 34109
Toll Free (800) 843-2025 | Direct (239) 513-6525 | Main (239) 513-6500 | Fax (239) 596-5474
Kyle.Christianson@RaymondJames.com
Any opinions are those of Kyle Christianson and not necessarily those of RJA or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. This is not a recommendation to purchase or sell the stocks of the companies mentioned. Leading Economic Indicators are selected economic statistics that have proven valuable as a group in estimating the direction and magnitude of economic change. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Bond prices and yields are subject to change based upon market conditions and availability. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.
