Receive Weekly Market Updates via Email
Weekly Market Update for September 13, 2024
by Vinicius d’Avila, Research Associate
Markets breathed some fresher air this week, with artificial intelligence and technology stocks bouncing back after last week’s sector rotations. During the week, the S&P 500 was up +4.02% and the Nasdaq was up +5.95%. On Monday, the S&P 500 was up +1.16%, Tuesday +0.45%, Wednesday +1.07%, Thursday +0.75%, and Friday +0.54%. The weakest-performing sectors were Energy and Financials, while Technology and Consumer Discretionary were the strongest. The 10-Year Treasury was down -5 basis points to 3.66%. The 6-Month Treasury ended the week at 4.63%.
Wednesday brought positive economic readings, with the Consumer Price Index showing inflation moderating to 2.5% in the year through August – down from 2.9% in the previous month and the lowest since February 2021. Though costs in some categories were higher than anticipated (cost of shelter, for one, rose 0.5% in August), takeaways were largely optimistic as evidence of broader inflation slowing was seen across more categories. When excluding annual changes in the cost of volatile food and energy prices (up 2.1% and down 4.0%, respectively), the resulting Core CPI was up 3.1%, 0.1% lower than in July.
On a similar note, Thursday’s Producer Price Index release showed a 1.7% annual increase in wholesale prices (which measures changes in cost of goods, transportation, warehousing), slightly below expectations of 1.8%. The PPI’s Core measure (excluding food, energy, and trade services) ticked up to 3.3%, also driven by higher shelter/guestroom rental costs (up 4.8% annually).
As the Federal Reserve meets next week, most investors are expecting a 0.25% rate reduction announcement on Wednesday – the first rate cut since the beginning of the COVID-19 pandemic. Some debate remains, however, on the case for a 0.50% rate cut, as some officials argue in favor of a stronger beginning to the easing cycle. CME’s FedWatch tool currently shows markets pricing in a 43% chance of a half-percentage point cut. Before then, committee participants will also look at August’s retail sales data on Tuesday – analysts expect sales to grow, though at a slower pace than in July.
The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Investors should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All investors are strongly urged to consult with their tax advisors regarding any potential investment.
Performance quoted is past performance. Past performance is not indicative of future performance. There is always a possibility of loss. Current performance may be lower or higher than performance shown. Differences in performance versus the indices/funds may be attributable, in part, to differences in the asset make-up of the strategy vs. the indices/funds. Performance calculations are based on the reinvestment of dividends and gains unless these amounts were paid out to the client. Performance is subject to revision. See www.ullandinvestment.com for important strategy disclosures.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investing involves risk; principal loss is possible. Investors should consider the investment objectives, risk, charges, and expenses of the strategy carefully before investing. This and other important information can be obtained by contacting Ulland Investment Advisors.
