In Markets "In a Nutshell"

Markets “In a Nutshell” for October 28, 2024

Investment Week at a Glance

Stocks finished lower for the week. The Dow Jones Industrial Average fell 2.7%, the S&P 500 was down 1.0%, and the NASDAQ rose 0.2%. Foreign stocks (MSCI EAFE) were down, falling 2.0%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.24%.  (Data source: Wall Street Journal)

Why Rates Have Risen Since Fed Rate Cut

Since the Fed made its first rate cut, the 2-year & 10-year Treasury yields have been on the rise. There are a few reasons for this, one is that the recent economic data has been strong as we saw the best jobs report in 6 months and unemployment fell. Real-time GDP estimates for the third quarter are currently 3.4% The market has also taken a 0.50% rate cut off the table for the November meeting and by the end of 2025 markets have raised their expected to 3.5%, up from 2.9% a month ago. Another reason may be the continued emergence of AI and the potential for increased productivity as AI continues to improve. Another reason is the election looming closer and both candidates proposing economic plans that could increase the deficit. The next couple of weeks will be filled with headlines with the election and a Fed meeting coming next week.

Market Headlines

The next two weeks will be a busy time for the market as we have earnings from some of the biggest names this week such as Alphabet, Apple, Amazon, Meta, Microsoft, and Berkshire. Next week we have the much-anticipated election and then a Fed meeting following the election with an anticipated rate cut. Some market volatility could be seen these next couple of weeks as the market digests all the headlines and prices in a winner in the election. It is important to stay invested throughout these headlines no matter who the winner in the election is. Any volatility we see is likely to be short-lived as we move further from these events over the next few weeks.

Quiz:

How much has the 10-Year Treasury Yield moved this year? (Scroll Down for Answer)

  1.     Down 0.3%
  2.     Flat
  3.     Up 0.2%
  4.     Up 0.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

Answer:

4.   Up 0.4%. Despite the Fed cutting rates, the 10-Year Treasury Yield has moved up 0.4% for the year.

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