🦉 This Week in the Markets

Stay well informed in just a few minutes

Author

Al Atencio
September 20, 2024 • Estimated Reading Time: 5 minutes

Welcome to your weekly market wrap-up.

The weekend is almost here, so grab a cup of coffee, get comfortable, and catch up on the financial markets.

I’ve been doing the reading and scrolling for you to bring you the most relevant updates.

end of week markets update

1) On Wednesday the Fed cut interest rates by 0.5%.

This move is intended to give the economy a boost.

But here’s the thing: Rate cuts usually signal concerns about economic weakness. Is this cut a timely boost or too little, too late?

Clearly that’s what Fed chairman Jerome Powell is trying to address:

“The US economy is in a good place and our decision today is designed to keep it there”

Jerome Powell - September 18th press conference

2) On Thursday the S&P 500 closed at a new record high. Marking the first all-time high since July and taking YTD gains close to 20%.

Not a bad year to be an investor! 🚀 

So, what’s next?

3) Let’s start by looking at what’s happened historically in similar situations:

4) At the same time, economic indicators continue to show a slowing but solid economy.

“In our view, recent economic data point to an economy that is slowing down but not heading into a recession. While employment gains have been more moderate over the last three months, average hourly earnings have increased, and the unemployment rate declined in August. On top of that, recent economic indicators continue to point to a strong economy. Initial jobless claim applications fell to the lowest since July, US retail sales accelerated in July by the most since early 2023, and gross domestic product rose at a 3% annualized rate during the second quarter, up from the previous estimate of 2.8%. Other indicators continue to signal robust growth: Restaurant bookings, TSA travel data, hotel bookings and box office revenue remain strong.”

So don’t let sensational headlines crying out "Recession" or your pessimist friends phase you out. Enjoy market rewards when they are on offer.

4) Another indicator we want to see rising is finally showing signs if life - mortgage demand.

6) Remember, as stock market investors, what really matters is that the companies we own keep growing their earnings.

charts

For the first time ever, more EVs were sold in China this year than ICE vehicles

This is great for climate change but don’t forget there are always other calculations:

“It remains our view that China is highly motivated to limit, as much as possible, future increases in its oil imports. Currently, China oil demand is a mere 4 barrels per person per year, a fraction of the 20+ barrels per person per year used in the United States, Canada, and South Korea or even the 13 barrels per person per year used on average among Lucky 1 Billion People rich countries. We believe geopolitical security is the over-arching driver of China’s aggressive push to ramp up domestic EV sales…”

Arjun Murti - Super-Spiked

Remember friends, day trading in and out of securities is like playing at the casino. But with even worse odds.

And finally, some parting wisdom:

Don’t to forget to share with your friends…

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