Receive Weekly Market Updates via Email
Weekly Market Update for October 4, 2024
by Jared Plotz, Director of Research
Equity markets eked out a fourth straight weekly gain despite additional uncertainties posed by tensions in the Middle East and a short-lived worker strike at major US ports. The S&P 500 rose +0.22% on the week and the Nasdaq +0.10%. On Monday, the S&P 500 gained +0.42%, Tuesday -0.93%, Wednesday +0.01%, Thursday -0.17%, and Friday +0.90%. The strongest performing sectors were Energy and Communication Services, while the weakest were Materials and Real Estate. Energy stocks were boosted as oil prices spiked due to conflict in the Middle East. Risk remains of a further supply squeeze in oil, with resulting higher prices at the gas pump.
Friday’s jobs report showed a big surprise, with nonfarm payrolls rising by 254,000 in September and both July/August numbers being revised higher. Expectations had been for gains of just 140,000-150,000. Unemployment ticked back down to 4.1% from 4.2% last month, while hourly earnings rose 4.0% from a year ago. Layoffs remain low and employers are seeking a greater number of workers. The release did not show a material impact from Hurricane Helene, which could negatively impact next month’s report. Overall, investors took solace in a view that the economy is chugging along better, even if stronger employment may lessen pressure on the Fed to cut rates fast.
45,000 US dockworkers at 36 East and Gulf coast ports went on strike Tuesday through Thursday. Their union had been seeking substantial wage increases and a ban on the introduction of additional automation processes. It was the first walkout by the employee group since 1977. These ports facilitate as much as 60% of US trade flow and JP Morgan estimated the economic costs to be roughly $4 billion per day. Fortunately, by Friday the two sides had reached a tentative agreement to avert a larger supply chain disruption through January 15. Port employers will increase wages by 62% over six years, while the issue of automation remains unresolved.
The 10-Year Treasury rose +21 bps to 3.97% this week. The 6-Month Treasury, utilized in our US Treasury strategy, ended up at 4.45%. Despite the rise in interest rates, our Preferred securities performed well, largely bucking the broader fixed income decline this week.
Next week, earnings season kicks off on Friday, with the first of the big banks releasing Q3 earnings results. We will also get September’s inflation metrics for CPI (on Thursday) and PPI (on Friday). Both metrics, along with employment data, will feed into the Fed’s next decision in November.
We send our sincere thoughts to our clients recently impacted by Hurricane Helene in the Southeast.
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.
