Week in Review: US Market Turned Corner ? What's Next This Week ?
Just For The Record.
US stocks ended higher on Fri, 16 Aug 2024, extending their biggest weekly percentage gains of the year.
This came about as worries of an economic downturn eased and investors focused on Fed’s chairman, Mr Powells Jackson Hole Economic Symposium this week, Aug 19 - 23.
US Composite Indexes.
The $S&P 500(.SPX)$ and $Nasdaq(NDAQ)$ notched their 7th consecutive session of gains, as stocks recouped losses from a tailspin 2 weeks ago. (see above)
The sell-off, sparked by (a) weak economic data on Non-farm payroll, (b) rise in Weekly jobless claims - heightened recession fears, confirmed the Nasdaq had entered correction territory.
For week ending 16 Aug 2024, all three indexes recorded their biggest weekly percentage gains since late October, with the S&P 500 and the Nasdaq posting their first weekly gain in five.
According to AXS Investments (NY), CEO, Greg Bassuk:
What is witnessed in today's markets is an extension of the comeback.
And also, the calming of earlier recession fears.
Positive economic reports out were really what's fueling this rally.
They are giving greater confidence to investors that are recession is likely to be avoided.
More importantly, the Fed will begin to cut interest rates in September 2024.
Confidence Boosting Reports.
The barrage of high-profile economic data this week, responsible for squashing fears in the market included:
The Bureau of Labour Statistics’s producer price index (PPI).
The Labor Department's consumer price index (CPI).
The Commerce Department’s retail sales report. from the Commerce Department.
Including the latest falling US Weekly jobless claims, (all) provided assurances that inflation continues meandering down toward the Fed's 2% target, underpinned by a healthy consumer spending.
Friday’s data also showed that in July 2024, US single-family housing starts dropped to a near 1-1/2-year low.
Meanwhile the University of Michigan's preliminary take on August 2024 Consumer sentiment showed stronger-than-expected improvement. (see above)
Consumer sentiments (actual-preliminary for August 2024) came in at 67.8.
Market expectation was 66.7.
Consumer sentiments (final reading for July 2024) was an upward revised 66.4.
MoM, it’s a +1.40 increased in sentiments.
Mr Powell Speaks…
Global central bank officials will speak at the symposium in Jackson Hole, Wyoming, next week, with Fed Chair Jerome Powell's keynote speech on Fri, 23 Aug 2024 potentially setting expectations for a US rate cut trajectory.
AXS Investments (NY), CEO, Greg Bassuk further added:
All eyes are going to be laser-focused on Powell's comments next Friday.
Market activity this year has consistently been based on (a) the likelihood and (b) the extent of Fed rate cuts.
Other Fed Member.
In an interview with National Public Radio, Chicago Fed chief Austan Goolsbee said:
The central bank officials should be wary of maintaining restrictive policy longer than necessary.
Financial markets are betting on:
A 74.5% likelihood that the Fed will cut its key policy rate by 25 basis points (-0.25%), as it ends its September policy meeting.
A diminishing 25.5% chance of a super-sized 50-basis-point (-0.5%) cut, CME's FedWatch tool showed.
Friday, 16 Aug Recap.
The Dow Jones Industrial Average rose +96.7 points, or 0.24%, to 40,659.76.
The S&P 500 gained +11.03 points, or 0.20%, at 5,554.25.
The Nasdaq Composite added +37.22 points, or 0.21%, at 17,631.72.
Among the 11 major sectors of the S&P 500, financials enjoyed the biggest percentage gain, while industrials suffered the largest drop.
$Applied Materials(AMAT)$ fell -1.9%, reversing its surge after the chip-making equipment firm forecast stronger-than-expected Q4 revenue.
$Amcor plc(AMCCF)$ posted a bigger-than-anticipated decline in Q4 sales. The packaging company's US-listed shares dropped -3.7% in the wake of the report.
US Market’s notes:
Advancing issues outnumbered decliners on (a) the NYSE by a 2.22-to-1 ratio and (b) on Nasdaq, a 1.53-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and no new lows.
The Nasdaq Composite recorded 66 new highs and 85 new lows.
Trading Volume on US exchanges was 10.11 billion shares, compared with the 12.27 billion average for the full session over the last 20 trading days.
Week of 19 Aug - 23 Aug.
Below are some of the economic reports and Fed’s socialization that would hopefully exert positive influence effects on the US market, propelling it to greater heights.
Tuesday 20 Aug
Atlanta Fed President Raphael Bostic will be speaking.
Fed Vice Chair for Supervision Michael Barr will be speaking.
Wednesday 21 Aug
United States FOMC Minutes release for July 2024.
Thursday 22 Aug
United States Existing Home Sales for July 2024
United States Jackson Hole Symposium (Aug 22-24)
S&P flash US manufacturing PMI.
US weekly jobless claims.
Friday 23 Aug
United States New Home Sales for July 2024.
Do you think the US market has turned the corner? Sure looks like it.
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Do you think US market has turned the corner, in what has been historically a bad month for trading ?
Do you think any of the abovementioned economic reports or Fed’s members socialization will add positive sentiments to the US market this week?
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