Investment Week at a Glance
Stocks finished lower for the week. The Dow Jones Industrial Average fell 0.2%, the S&P 500 was down 0.1%, and the NASDAQ fell 0.2%. Foreign stocks (MSCI EAFE) were also down, falling 1.2%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.22%. (Data source: Wall Street Journal)
Expected Rate Cut Helps Broaden Gains
With markets continuing to price in a rate cut later this month, small caps surged in August, rising 7.5%. Automakers, airlines, and homebuilders also had a strong month, and the equal-weight S&P 500 hit a new all-time high. A rate cut typically helps equities as a whole, but especially the sectors that are sensitive to interest rates. This is likely to help the sectors that have lagged the market while rates were higher and continue to broaden market gains.
Investment In Tech Highest Since Late 90’s
With the AI boom in the past few years, tech investment contribution to GDP has risen to levels last seen in the late 90’s. Amazon, Google, Microsoft, and Meta have doubled their annual infrastructure spending to roughly $600 billion over the past two years. Overall investment in computer hardware is up 61% annually, and software spending rose 26% the past quarter, the largest gain in 22 years.
NVIDIA Falls Despite Earnings Beat
NVIDIA reported earnings last week, and despite beating expectations, the stock fell due to sales for its data centers being less than expected and guidance not blowing away investors. Despite the slight fall, the company remains valued at $4.2 trillion and makes up 8% of the S&P 500. Investors haven’t had much to complain about as NVIDIA is up over 235% the past 2 years. (CNBC)
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Quiz
How much has the price of Gold rose this year? (Scroll Down for Answer)
- 18%
- 25%
- 29%
- 34%
Answer:
4. 34%. Gold has continued to perform well throughout the year as it nears $3,600 per ounce. Gold is up over 84% the past 5 years as well.
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