Party Ended?
The 2024 stock market rally in stocks has come to a screeching halt.
The $S&P 500(.SPX)$ index has fallen -4.6% in April 2024 so far.
All 3 major US indexes are on track for their first negative month since October 2023: (see below)
The Dow Jones’s gains chalked up in 2024 are wiped out (almost), left just +0.2%.
S&P 500 index is still up +5.1%.
Nasdaq still have a +3.9% gain YTD.
Root Causes for the Tumble?
April CPI data showed, inflation remains stubbornly above the Fed’s 2% target.
Non farm payroll added a stunning 303,000 jobs in March, exceeding analysts’ expectations.
A boost to oil prices from rising tension in the Middle East did not help either.
US retail sales rose for the 2nd consecutive month, highlighting US consumers’ resilience even with interest rates at a 23-year high.
On 16 Apr 2024, Fed Chair Jerome Powell remarked that rate cuts will likely come later than expected and that they will need to see more signs of moderating inflation before pivoting.
Based on latest CME FedWatch Tool, traders now project that the Fed will begin easing rates earliest in September 2024.
IMF Assessment.
On the same Tuesday, the IMF also upgraded its forecast for American economic growth in 2024.
However, it also warned that inflation will be tough to tameand while the US remains a key driver of global growth, its economy is “overheated”.
US Bond.
Bond yields have spiked last week as investors wager that rates will remain elevated for longer than expected.
The 10-year US Treasury yield was trading at 4.65% at 3 pm ET on Thursday. (see above)
Middle East Unrest.
Adding to Wall Street’s woes are brewing tensions in the Middle East.
Iran launched airstrikes at Israel over the weekend in retaliation for a suspected Israeli strike on its embassy compound in Syria earlier this month.
On Fri, 19 Apr 2024, Israel carried out a counterstrike inside Iran in response.
Israel has not commented, while Iranian officials and state-aligned media have so far sought to play down the incident.
Energy Price.
Oil prices initially spiked higher on reports of the attack on Iran but retreated as the limited nature of the action became apparent.
Brent crude futures, the international benchmark, were down -0.4% at $86.80 per barrel by 6.45 am ET, having earlier spiked more than 3%.
US crude futures slipped -0.3% to trade at $82.50, also reversing earlier gains.
Both contracts have fallen so far this month but are still up about +15% YTD.
Gold Rush - Now?
Investors are searching for safer havens over stocks.
Gold futures have risen in April 2024, as traders seek protection from geopolitical turmoil and persistent inflation.
The most actively traded gold futures contract settled at $2382.30 a troy ounce last Thursday.
US Mortgage.
Mortgage rates soared last week, breaching the key 7% threshold and extending America’s home affordability crisis. (see above)
Its rising because the Federal Reserve is not expected to cut interest rates until Q3 2024.
Dilemma facing potential homebuyers:
To buy before rates rise even more.
Hold off in hopes of interest cut later in the year.
If inflation stalls any further, or worsen, mortgage rates could climb higher this year.
US Quarterly Earnings.
Roughly 13% of S&P 500 companies have reported quarterly results so far.
Despite the strong start, corporate earnings did not manage to excite investors.
According to FactSet data, blended Q12024 earnings growth, that combines estimates with actual results, is roughly +0.9%.
Yet, stocks continued to tumble.
Corporate Earnings for This Week.
Will this week's corporates’ earnings be able to lift the US market higher?
Afterall, these are the whose who US stocks, reporting their keeps. (see below).
AM = earnings reporting in morning. PM = after market closed for the day.
Mon - 22 Apr 2024.
Verizon Communications Inc. (VZ). AM.
Tue - 23 Apr 2024.
Visa Inc (V). PM.
$Tesla Motors(TSLA)$ .PM.
Pepsico, Inc. (PEP). AM.
Wed, 24 Apr 2024.
International Business Machines Corporation (IBM). PM.
Lam Research Corporation (LRCX). PM
Thu, 25 Apr 2024.
$Microsoft(MSFT)$ . PM.
$Alphabet(GOOG)$ . PM.
T-Mobile US, Inc. (TMUS). PM
Fri, 26 Apr 2024.
$Exxon Mobil(XOM)$ . AM.
Chevron Corporation (CVX). AM.
AbbVie Inc. (ABBV). AM.
Will they or won’t they be able to turn the US market around ? Really hope they could !
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Literally can't stand Zuck but I can see new high for Meta after earnings.
Pls help to "Re-post". Tks! Rating is important (to me).
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