The Week in Review: 10/14/24
A champion is someone who gets up when he can’t.” – Jack Dempsey
Good Morning ,
It was a choppy week for stocks. The major indices continued volatility, ultimately rallying on Friday.
The S&P 500 and Dow Jones Industrial Average set record highs.
The market placed geopolitical worries, along with concerns about Hurricanes Milton and Helene, on the backburner and focused on economic releases and Fed policy instead.
The September Consumer Price Index report was hotter-than-expected at the headline (actual 0.2%; expected 0.1%) and core (actual 0.3%; expected 0.2%) level. The year-over-year growth rate of core-CPI increased to 3.3% from 3.2% in August and the growth rate of headline CPI slowed to 2.4% from 2.5% in August.
Some positive news from the report was that the shelter component, which has been the biggest driver of core inflation, saw its smallest increase (+0.2%) since June. Investors also received weekly jobless claims, which totaled 258,000 versus last week's count of 225,000.
Other data included the September Producer Price Index and preliminary consumer sentiment data from October, which also supported the idea that the Fed will continue cutting rates.
The market didn't react much to the minutes for the September 17–18 FOMC meeting, which didn't contain any surprises. The minutes showed that almost all participants saw upside risks to the inflation outlook as having diminished, while downside risks to employment were seen as having increased.
By the end of the week, market participants were digesting some earnings results from influential names in the financial space. JPMorgan Chase, Wells Fargo, and BlackRock all received positive responses to their good earnings results.
The third quarter earnings season kicked off last week with initial results coming out better than expected. With 6% of S&P 500 companies reporting, the index’s blended growth rate for the quarter is 4.1% (Source: Factset).
The better-than-expected results last week came on the back of several large banks: JPMorgan Chase, Wells Fargo, and BNY Mellon.
Earnings season will continue this week with a little under 10% of S&P 500 companies reporting. We will receive reports from Bank of America, Johnson & Johnson, United Airlines, Walgreens, Goldman Sachs, Netflix, and Procter & Gamble among others.
On the economic front, the Retail Sales and Industrial Production reports will be released on Thursday.
Have a wonderful week!!
Michael D. Hilger, CEP®
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