In Markets "In a Nutshell"

Markets “In a Nutshell” for July 29, 2024

Investment Week at a Glance

Stocks finished mixed for the week. The Dow Jones Industrial Average rose 0.70%, the S&P 500 was down 0.80%, and the NASDAQ fell 2.10%. Foreign stocks (MSCI EAFE) were also down, falling 1.50%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.19%.  (Data source: Wall Street Journal)

Market Rotation Continues

Once again technology was the loser last week as the NASDAQ fell over 2%. We continue to see a broadening out of the market as the losers from the past 2 years have become the winners over the past month. Despite most sectors being positive for the week, the overall market indexes fell due to the large weighting of technology stocks. Real Estate has led the way in July, up over 4% whereas technology is down over 4% and communication services is down over 7%. Overall, the S&P 500 is down over 1% this month despite 8 of the 11 sectors being positive. Another sign of this rotation to continue is that projected earnings growth for the smaller companies in the S&P 500 is beginning to pick up, whereas earnings growth for the larger companies has slowed, but continues to be positive.

Fed Meeting

The Fed meets this week and will discuss when we may see a rate cut. It is expected that rates will remain unchanged at this meeting but that in September we will see a rate cut. Typically, once the Fed starts to cut rates, it is hard to stop as the momentum builds. This is shown in the market expectations that we see 3 cuts throughout the end of the year, one in each of the last 3 meetings. One thing that could cause the Fed to hesitate is them not wanting to look political and cutting rates right before the Presidential election. Although the Fed is supposed to be non-political, many politicians put pressure on them to do things that could help them be elected or reelected. However, it plays out, one thing is certain and that is the market believes rate cuts are coming before the end of the year.

Quiz:

How much is the equal weight S&P 500 up in the past month? (Scroll Down for Answer)

  1.     2%
  2.     4%
  3.     6%
  4.     8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer:

2.   4%. The equal-weight S&P 500 has outperformed the S&P 500 over the past month. This has not happened in some time and is a sign of the market gains being more spread out instead of the top mega-cap names carrying the market higher.