The Week in Review: 10/07/2024

“Common sense is very uncommon.” - Horace Greeley

Good Morning ,

Our markets were volatile last week.

The escalating conflict in the Middle East and the dock worker strike brought some volatility to the markets before Friday’s jobs report brought some stability back. Despite the volatility, the broad indices eked out some positive returns, continuing their advance.

Iran is the world’s seventh largest oil producer, contributing 4 million barrels per day to global production. The escalating conflict caused oil futures to rally 9%, their best week since January 2023.

The dock worker strike could have also had a significant impact on our economy.

Estimates by economists place the impact at $3-5 billion per day. Fear of a prolonged strike caused a run on essentials at many stores across the country.

Luckily, the two sides came to an agreement that will give workers a 62% pay increase over the course of the new 6-year contract. Additionally, there will be provisions to protect workers from automation and AI implementation which would put individuals at risk of losing their jobs.

This is one of the first notable pushbacks against AI implementation.

We see the progress of AI on the consumer end of the equation with enhancements to goods and services, but the production end of the equation is also being affected.

AI development and implementation are increasingly putting jobs at risk. This likely won’t be the last pushback against the new technology.

Nonfarm payrolls increased by 254,000 in the month of September, the largest gain since March. July and August reports were also revised upwards by 55,000 and 17,000 respectively, adding to the better-than-expected results.

After this report, the odds shifted from roughly 50/50 to being a near certainty that the Fed will cut 25 bps (0.25%) in November as opposed to another oversized 50 bps (0.50%) cut.

There will still be one more monthly report to influence the Fed’s decision.

This week’s economic highlights will be CPI and PPI reports on Thursday and Friday respectively as well as the release of the Minutes from the last FOMC meeting.

Third quarter earnings season will also kick off with JPMorgan Chase, Wells Fargo, BlackRock, and Delta Airlines getting the ball rolling amongst several others.

Have a wonderful week!

The opinions expressed herein are those of Michael Hilger and not necessarily those of Raymond James & Associates, Inc., and are subject to change without notice. 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. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

The information contained herein is general in nature and does not constitute legal or tax advice. Inclusion of these indexes is for illustrative purposes only. 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. Past performance does not guarantee future results. The Dow Jones Industrial Average (INDU) is the most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The Dow Jones Transportation Average (DJTA, also called the "Dow Jones Transports") is a U.S. stock market index from the Dow Jones Indices of the transportation sector, and is the most widely recognized gauge of the American transportation sector. Standard & Poor's 500 (SPX) is a basket of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value, and its performance is thought to be representative of the stock market as a whole. The S&P 500 is an unmanaged index of widely held stocks that is generally representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs and other fees, which will affect investment performance. Individual investor’s results will vary. The NASDAQ Composite Index (COMP.Q) is an index that indicates price movements of securities in the over-the-counter market. It includes all domestic common stocks in the NASDAQ System (approximately 5,000 stocks) and is weighted according to the market value of each listed issue. The NASDAQ-100 (^NDX) is a modified capitalization-weighted index. It is based on exchange, and it is not an index of U.S.-based companies. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks.

U.S. government bonds and Treasury notes are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return, and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury notes are certificates reflecting intermediate-term (2 - 10 years) obligations of the U.S. government.

The companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapit obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.

Dividends are not guaranteed and must be authorized by the company's board of directors.

Diversification does not ensure a profit or guarantee against a loss.

Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors.

International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility.

The companies engaged in the communications and technology industries are subject to fierce competition and their products and services may be subject to rapid obsolescence.

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.

The information contained within this commercial email has been obtained from sources considered reliable, but we do not guarantee 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. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Charts are reprinted with permission, further reproduction is strictly prohibited.

If you would like to be removed from this e-Mail Alert Notification, PLEASE click the Reply button, type "remove" or "unsubscribe" in the subject line and include your name in the message, then click Send.