Mid-Week Market Minute 9.25.24

Stocks Rally; PCE Price Index Release on Friday

Stocks rallied in early trading this week with both the S&P 500 and Dow Jones Industrial Average reaching all-time highs on Tuesday. Meanwhile, emerging market stocks rallied more than 2% this week, led by shares in China which saw their largest one-day gain in more than four years Tuesday on the heels of stimulus measures announced by Beijing.

The recent momentum in global stocks follows last week’s announcement by the Federal Reserve, where the central bank enacted a 50-basis point rate cut. With just two policy-setting meetings left on this year’s Federal Reserve calendar, investors continue to price in aggressive rate cuts, anticipating as much as 75 basis points in additional easing by year-end, which would leave put the federal funds rate around 4%. Interest rates had been falling leading up to the Fed announcement last week, and consumers took advantage with applications to refinance homes jumping more than 20% last week, according to the Mortgage Bankers Association.

Despite falling interest rates, the Conference Board’s measure of consumer confidence for August saw its biggest one-month decline in more than three years with respondents citing concerns about employment and inflation. This Friday will bring key inflation data in the form of the PCE Price Index. For August, economists expect core inflation to come in at 0.2%, unchanged from July’s reading. This would leave year-over-year inflation around 2.7%, a slight uptick from July’s reading of 2.6%. On the employment front, next Friday will bring the widely followed nonfarm payrolls report, a key indicator for the health of the U.S. labor market. Expectations are for 140,000 new jobs added in September with the unemployment rate remaining steady at 4.2%.

Source: GSAM, CNBC, JPMorgan, FactSet

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results.