The Consumer Discretionary sector had a strong performance today (thanks to Tesla), while the Materials sector ranked lowest on the leaderboard; Energy remains at the bottom YTD… small caps are still struggling month-to-date, with Russell 2000 Value lagging behind (also in last place YTD).
— Liz Ann Sonders (@LizAnnSonders) October 24, 2024
This week, the stock market faced challenges as bank stocks pulled down the overall market, even though technology shares made gains. The S&P 500 remained relatively stable on Friday after reaching nearly a 1% increase earlier in the session. New York Community Bancorp fell by 8.3% due to a bleak forecast, while Goldman Sachs Group Inc. decreased by 2.3%, and JPMorgan Chase & Co. saw a 1.2% drop.
The S&P 500 may close lower this week, breaking a 6-week winning streak.
A decline a month later is quite typical, but a year later? Positive 19 out of 22 instances (86.4%), with an average increase of 12.6%.
In conclusion, prolonged weekly winning streaks are characteristic of bull markets, and currently, we are in a bull market.
— Ryan Detrick, CMT (@RyanDetrick) October 25, 2024
Cryptocurrency stocks also experienced a downturn following a report from the Wall Street Journal stating that the US is probing Tether for potential breaches of sanctions and anti-money laundering regulations.
Stocks To Watch | 📊 Ready, set, trade! Keep an eye on these stocks as they set the market abuzz! #StockMarket
— ET NOW (@ETNOWlive) October 25, 2024
Nonetheless, a benchmark of the “Magnificent Seven” mega-cap stocks, featuring tech leaders such as Apple, Microsoft, and Amazon, recorded its most significant consecutive gain since February. Traders are currently preparing for important events, including the upcoming US presidential election and next week’s employment report, for insights regarding potential Federal Reserve interest rate reductions. “Investors are still exercising caution as we approach a critical couple of weeks,” remarked Henry Allen at Deutsche Bank.
#USMarketAtOpen | The S&P 500 opened flat, NASDAQ 100 rose 0.6%, along with other notable updates 👇#UPS #Tesla #Carrier @Nasdaq
— ET NOW (@ETNOWlive) October 24, 2024
“There has been hesitance to see the rally extend further until we gain some clarity on these issues, which will significantly influence the outlook as we move into the following year.”
Next week, five of the “Magnificent Seven” are scheduled to announce earnings, including Alphabet Inc., Meta Platforms Inc., and Amazon.com Inc.
Banks face challenges, pulling down the S&P 500
These firms are poised for double-digit earnings growth driven by advertising expenditures.
Apple Inc. may benefit from Chinese sales of its newest iPhones, while Microsoft Corp. is expected to address concerns about falling behind competitors in artificial intelligence during its earnings presentation.
“These earnings reports will likely play a pivotal role in shaping how investors perceive this earnings season,” stated Anthony Saglimbene at Ameriprise. “As long as the fundamental conditions remain solid, the bull market should continue to navigate short-term fluctuations in sentiment.”
On the economic side, data indicated that consumer sentiment in the US rose to a six-month high in October as households became more optimistic about purchasing conditions. They anticipate prices to increase at an annual rate of 2.7% over the next year, unchanged from the previous month.
Treasury traders are concluding a tumultuous week which saw a volatility measure in the bond market reach its highest level of the year, signaling further instability ahead. This week’s fluctuating events suggest even greater volatility in the upcoming days as the US bond market braces for various events—from crucial employment data to the US election and a Fed meeting. These developments and upcoming reports will be fundamental in determining market sentiment and investor outlook as we transition into the following crucial weeks. There’s undeniably no manipulation in that, particularly concerning the election.
Investors are now poised for next week’s Federal Reserve meeting for insights on future monetary policy and any indications regarding quantitative easing strategies.
