August 30, 2024, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. The stock market ended the week and the month positively, buoyed by economic data that suggests a “just-right” Goldilocks economy, characterized by stable growth and moderated inflation. The Dow Jones Industrial Average rose by 0.6%, marking a record high for the fourth time this week. In addition, the S&P 500 and Nasdaq Composite saw increases of 1% and 1.1%, respectively. The Gross Domestic Product (GDP), an indicator of economic growth, advanced at an annualized rate of 3% during the second quarter, an improvement from the prior estimate of 2.8%. The strength of the U.S. economy is largely attributed to robust consumer spending and business investment. Furthermore, consumer spending in the U.S. demonstrated solid growth in July, suggesting that the economy remains strong despite a moderate rise in prices.
August 23, 2024, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. U.S. stocks rallied closer to their records after Fed Chair Jerome Powell said the “time has come” to lower its main interest rate from a two-decade high. For the week, both the S&P 500 and Nasdaq rose 1.4%, while the Dow Jones closely followed with a 1.3% gain. Powell further stated, “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data.”
August 16, 2024, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. Markets rallied with a strong recovery on news of cooling inflationary trends. The Nasdaq soared 5.3% on the week, as tech stocks jumped after a sharp selloff in recent weeks. The S&P 500 gained 3.9% and the Dow added 2.9% over the week. The data for July indicates a waning of wholesale inflation in the United States, suggesting that price pressures are subsiding. When food and energy prices, which are subject to monthly fluctuations, are excluded, core wholesale prices remained unchanged from June and rose by 2.4% compared to July 2023. These increases were more subdued than what economists had predicted and were nearly in line with the Federal Reserve’s inflation target of 2%. Furthermore, consumer prices increased by 0.2% in July, bringing the annual rate to 2.9%, after two consecutive months of stable or declining prices, and falling below 3% for the first time since March 2021. The median change in Core CPI for July was an increase of 0.3%, with a 12-month increase of 4%. Over the last 13 presidential elections, the S&P 500 Index has typically shown positive performance in the 90 days before and after Election Day.
August 9, 2024, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. Before markets opened on the first full trading week of August, investors were already raddled by a poor job report and recession worries, then before Monday’s market open, global equities were further impacted by Japan’s Nikkei 225 experiencing its largest daily loss due to an unexpected interest rate hike from the Bank of Japan. It was a wild, chaotic trading week where the S&P 500 sank more than 3% and lost $1.3 trillion in value, notching its worst day since the 2022 bear market. After recovering another 0.5% on Friday, the S&P 500 closed the first week of August near flat, just down 0.05%. The Dow jones was off 0.6% while the finished -0.2% on the week.
August 2, 2024, Weekly Stock Market Return Recap, by Kip Lytel CFA, Montecito Capital Management. All major US stock indices sharply sold off for the week on recession fears and concerns over chip-tech stocks. Both the S&P 500 and the Dow fell 2%, while the Nasdaq dropped by 3%. Disappointing US jobs report spurred recession fears which, in turn, rattled stocks and redirected concerns that the Federal Reserve missed the window to stimulate the economy with an earlier rate cut. In particular, chips stocks took it in the nose after Intel (INTC) plummeted -26% on Friday, after the company cut earnings expectations, its dividend and work force.
