Markets finished strong again this week on the back of earnings and tech. Will market bears have their way or will they stave off hibernation for a little while longer?
Monday S&P 500 -0.96% | NASDAQ -1.18%
Markets fell following a strong showing on Friday of the prior week because of the jobs report. After a bigger rate cut of .50% in September, questions revolve around whether there will be two .25% rate cuts before the end of the year or a .25%-.50% cut in December, which is effectively a skipped rate cut in the month of November.
Tuesday S&P 500 0.97% | NASDAQ 1.45%
Tuesday recovered all the losses from Monday’s trading and the NASDAQ came out stronger as major tech stocks continued to gain on future product outlook. Little economic data was released on the day but we should expect more concentrated price movement as the 3rd quarter earnings begin to roll in.
Wednesday S&P 500 0.71% | NASDAQ 0.60%
Trading momentum continued into mid-week’s close. Mortgage applications have fallen for the 3rd straight week following a jump in applications in late September
Thursday S&P 500 -0.21% | NASDAQ -0.05%
CPI inflation data came out to be a bit hotter than forecasted. Markets appeared to shrug off the announcement indicated by flat trading into midday. Initial and continuing jobless claims both surprised to the high side. The data is mixed from the Federal Reserve’s perspective as an increase in CPI dampens their ability to control prices while a tightening labor market typically occurs in a contracting economy.
Friday S&P 500 0.61% | NASDAQ 0.33%
Markets pushed through the finish line with some notable headlines. Consumer sentiment for October fell slightly. Big banks reported earnings for the 3rd quarter and showed strength. Several announced their revenues were slowing but were at or within estimates. Markets responded positively as a strong financial system helps with a slowing economy.
Conclusion S&P 500 1.11% | NASDAQ 1.13%
Markets notched good gains on the week as the 2nd week of the quarter came with headlines of inflation, jobs and announcements for corporate earnings. The three proved to sway the markets each independently but, as a whole, will determine the rate cut decision in the next few weeks. The futures markets suggest that there is a higher chance of no rate cut in November, or a .25%, as opposed to a jumbo rate cut like the one we had in September. Fall is upon us and tendencies tend to lean more bearish this time of year, but the rally has only continued. Markets may not be ready to go into hibernation just yet, which excites the bulls in the market. Caution should be exercised in an ever-changing environment as we enter a new season for equity and bond markets.
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