Weekly Market Summary: September 16, 2024
This week is pivotal for the markets, with key earnings reports and the highly anticipated FOMC meeting likely to set the tone for investor sentiment heading into the end of the year. Here’s what to watch as markets navigate potential rate changes, key earnings, and overall economic conditions.
Last Week’s Stock Market Recap
Last week, the S&P 500 gained 3.1%, with the Nasdaq rising by 0.65%, driven primarily by a rebound in tech stocks. Nvidia led the rally with a 12% jump, while energy stocks lagged behind. Gold prices increased by 3.2%, and Bitcoin climbed 8%, benefiting from a positive macroeconomic outlook.
Key Earnings Reports This Week
Several key companies are reporting earnings this week, offering valuable insights into different sectors of the economy:
- FedEx (FDX) – Reporting on Thursday, September 19. FedEx’s earnings will provide insight into global logistics and how the company is handling ongoing supply chain disruptions and cost management(Kavout)(Strike.Market).
- General Mills (GIS) – Reporting on Wednesday, September 18. The consumer goods giant will shed light on how inflationary pressures are affecting food pricing and consumer behavior(Kavout)(Strike.Market).
- Darden Restaurants (DRI) – Also reporting on Thursday, Darden’s earnings will focus on how the restaurant industry is navigating rising labor costs and inflation(Nasdaq)(Kavout).
- Lennar (LEN) – Reporting on Thursday, September 19. Lennar will provide critical insights into the housing market, as mortgage rates and demand for homes remain in flux(Kavout)(Strike.Market).
FOMC Meeting: What to Expect
The FOMC meeting on September 18 will be one of the most closely watched events of the year. Analysts expect a 25 basis-point rate cut, bringing the federal funds rate from 5.25% to 5.50%. However, the final decision will be influenced by recent economic data, including retail sales figures and housing starts, both of which will be released before the meeting.
- Rate Cut Scenario: A cut would likely spur short-term rallies in rate-sensitive sectors like tech and real estate, as lower borrowing costs would boost growth.
- Holding Steady: If the Fed chooses to hold rates steady, the market may experience increased volatility, particularly in sectors that are highly leveraged or growth-focused(Kavout)(Nasdaq).
In the News
Geopolitical Tensions in Ukraine and the Middle East: Ongoing conflicts, particularly the Russia-Ukraine war and recent tensions in the Middle East, continue to weigh on global markets. The rise in freight costs and potential oil supply disruptions have already pushed Brent crude prices higher. This could lead to increased volatility in energy stocks and higher prices in the commodities market, affecting broader market sentiment globally(Risk & Insurance)(JPMorgan Asset Management).
Global Election Cycle: Over 60 elections are scheduled worldwide in 2024, with major implications for international trade and policy. U.S. elections in particular are likely to influence corporate decision-making, trade relationships, and foreign policy, introducing uncertainty into markets. Companies with global exposure will need to stay agile as these political shifts unfold(Risk & Insurance).
China’s Economic Slowdown: China’s slower growth, coupled with rising geopolitical tensions between China and the West, is leading to shifts in global supply chains and trade dynamics. Investors are closely monitoring China’s economic policies, as well as the impact of regulatory changes in industries like AI and tech. Any significant developments could influence global markets, particularly those with heavy China exposure(World Economic Forum).
Best and Worst Performers from Last Week
- Best Performers:
- Nvidia (NVDA) surged over 12%, bouncing back from earlier declines, as investors returned to tech stocks.
- Bitcoin-related stocks saw significant gains following a 8% rise in Bitcoin prices.
- Worst Performers:
- ExxonMobil (XOM) and other energy stocks underperformed, with global uncertainty affecting the energy sector.
Stock with Greatest Upside Potential: Nvidia (NVDA)
Technically, Nvidia has rebounded off its support levels, with improving RSI and moving averages. Given its strong rally last week and the potential for a Fed rate cut, Nvidia has significant upside potential, especially in a lower interest rate environment. Investors should watch for positive catalysts from the FOMC meeting.
Wrap Up
This week’s market performance will be heavily influenced by the FOMC meeting and key earnings reports. Rate-sensitive sectors like tech and real estate could see notable movements depending on the Fed’s decision, while companies like FedEx, General Mills, and Lennar will provide key insights into broader economic trends. Prepare for a potentially volatile but critical week ahead!
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