Receive Weekly Market Updates via Email
Weekly Market Update for October 18, 2024
by Jared Plotz, Director of Research
Markets continued to trend upward, advancing for the sixth consecutive week. During the week, the S&P 500 was up +0.85% and the Nasdaq +0.80%. On Monday the S&P 500 was up +0.77%, Tuesday -0.76%, Wednesday +0.47%, Thursday -0.02%, and Friday +0.40%. The 10-Year Treasury, a rate indicator, closed the week at 4.08%, unchanged from last week. The 6-month US Treasury, a favorite of our US Treasury strategy, remained roughly flat at 4.46%.
Economic data was largely favorable this week. September retail sales came in better than expected, rising 0.4% sequentially from August. Initial, and continuing, claims for unemployment were both lower than forecast. Homebuilder sentiment improved, and housing starts were slightly ahead of expectations on Friday.
Additional banks released Third Quarter results this week. Bank of America, US Bank, and PNC showed stronger profits from loans, with relatively stable credit trends. Goldman Sachs and Morgan Stanley demonstrated continued momentum in investment banking and asset management fees. Trading results amongst the big investment banks have been the best on record. Banks on the whole appear to have more than adequate reserves for loan losses today, and thus improving profits on each loan as the Fed begins to cut short-term rates may boost bank earnings going forward.
Unfortunately, United Healthcare, one of our larger equity holdings, fell on Tuesday. It reported solid revenue and earnings numbers, but margins disappointed and the company had to slightly lower its full-year guidance. Taiwan Semiconductor – not a portfolio holding, but the largest contract manufacturer of Nvidia’s advanced chips – jumped 10% on Thursday when it revealed sales growth of 40% and earnings growth over 50%. The company also said that it expects Fourth Quarter sales to sequentially grow twice as fast as analysts were anticipating. Demand for AI chips remains very robust, and we think this may bode well for Nvidia’s report next month.
Next week, earnings season continues with reports by General Motors, Boston Scientific, Vertiv, and Tesla. New and existing home sales for September will be released mid-week, and then durable goods orders will come on Friday.
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.
