Weekly Newsletter 10/25/24
Good afternoon,
The U.S. stock markets were up slightly Friday in morning trading. Yesterday was considered a choppy to mixed trading day in which the S&P snapped its first three-day losing streak since early September. The world’s leading electric car maker was the standout on earnings, while software, parcel/logistics, managed care, homebuilders, hotels, rental cars and most shorted names also fared well. Rails, hospitals, precious metals and ride share among the laggards. Treasuries mostly unchanged with a bit of a rise at the short end; yields higher across the curve for the week. Dollar index little changed. Gold down 0.3%. WTI crude up 1.0% and on track for a modest weekly gain.
It has been a quiet finish to the week. The latest batch of corporate earnings has produced some better takeaways. Investors will be focused on, what has been dubbed, the Magnificent 7 reports next week and marks the peak of Q3 earnings season.
A bit busier on the economic reporting front next week with nonfarm payrolls on Friday. Various reports and numbers support election uncertainty will remain an overhang on risk sentiment. For instance, there has been a rush into US money-market funds and pushed the industry's total assets to a record $6.51T.
Supply/deficit concerns have received some blame for the rapid rate repricing and will remain under scrutiny with next week's refunding announcement.
Institutional investor sentiment indicates once the removal of election overhang, markets could continue to lead to another pain trade higher, particularly with favorable seasonality and resumption of buybacks. What is a “pain trade” you might ask? A pain trade is generally considered a condition where investors are on the sideline as the market goes higher…or “all in” the market as it has a 10-20% correction or as some might say “the market is crashing.” Rarely do I hear, “these markets are too good.” The older I get the more I believe the markets are moved by Behavioral Science more than fundamentals or technical.
For those fundamental types: Headline September durable goods orders declined more than consensus, though core capital-goods orders saw better-than-forecast growth (and August core orders revised up). Final University of Michigan consumer sentiment (and inflation expectations) coming later this morning. Nothing scheduled in terms of Fedspeak. Next week brings JOLTS job openings on Tuesday, ADP private payroll, first look at Q3 GDP and pending home sales on Wednesday, initial claims, ECI, personal income/spending/PCE inflation and Chicago PMI on Thursday, and employment report, ISM manufacturing and construction spending on Friday. Street currently looking for a ~130K increase in October NFP following the outsized 254K increase in August.
The World Series starts tonight in Los Angeles as the Major League Baseball executives and broadcast partner, Fox, could not be any happier for the match up of the N.Y. Yankees v the Los Angeles Dodgers. With combined metro populations in excess of 36 million (more than any state other than CA), this will be the 12th time in MLB history these two teams have met, albeit the first time since 1981. The Yankees hold an 8-3 edge. A historic match up of talent and staggering payrolls…$550,000,000 this year alone for these two teams and committed player contracts totaling more than $3.5B. Keep working on that fastball kids.
Have a great weekend and thank you for your time. The link below has additional financial articles and resources for your review.
https://www.raymondjames.com/evangelista/resources
“Ignite the mind’s spark to rise the sun in you.” — Florence Nightingale
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.
