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Weekly Market Update for November 8, 2024
by Jared Plotz, Director of Research
Election day has come and gone; the Federal Reserve executed their widely expected quarter-point rate cut; and stocks have taken off. The end of election uncertainty increased risk appetite and allowed buyers to return to the markets – after many participants had reduced exposures at the end of last month. The S&P 500 ended the week up +4.7% and the Nasdaq +5.7%, while the 10-Year Treasury fell -8 bps to 4.30%. Although a lot has happened of late, we will keep this week’s remarks brief given our quarterly client update will hit the presses next week. On Monday the S&P 500 was down -0.3%, Tuesday +1.2%, Wednesday +2.5%, Thursday +0.7%, and Friday +0.4%.
In economic news, the services sector of the economy showed improvement in October. Weekly unemployment filings were steady, and consumer sentiment appears back on the rise. On Wednesday, the Federal Reserve cut its benchmark rate by 25 bps (0.25%) to a range of 4.50-4.75% in a unanimous vote. This encouraged Preferred securities to move higher. Another quarter-point cut is expected in December.
Equity portfolio holding Axon – which not only manufactures Tasers and body cameras, but is also the “digital librarian” for thousands of public safety departments – reported strong quarterly results this week. Sales grew 32% from a year ago, while profits were up 42%. Both metrics were better than expected and the company raised its guidance for the full year. Management noted major deals signed with the Department of Homeland Security, the IRS, and Amtrak. The stock rose over 28% on Friday. Also this week, portfolio holding Nvidia rose 9% after being selected to replace Intel as the sole chipmaker in the Dow Jones Industrial Average index. We remain positive on the fundamentals of their business, and it remains one of our largest equity holdings.
Next week we salute our Veterans on Monday. Federal Offices and bond markets will be closed, but our office and the equity markets will be open. Tuesday will return to normal. Another week of quarterly earnings brings reports from the likes of Home Depot, Cisco, Hewlett Packard, and Disney. It will be the last heavy week of releases, after which earnings will trickle with Lowe’s on the 19th and Nvidia on the 21st. Economic releases will include October’s inflation readings of CPI & PPI mid-week, with retail sales and a few manufacturing data points on Friday.
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