Weekly Review for week ending 7/19/24
Last week was quite the rollercoaster for the markets. The NASDAQ took a notable hit, dropping nearly 4% as technology stocks stumbled. Meanwhile, the S&P 500, which gives us a broader view of the market, declined by about 2%. On the flip side, small-cap stocks kept their momentum going, with the S&P 600 rising by 0.8%.
What I think we're seeing is a shift from the tech-heavy rally to a more diversified market performance. This makes sense, especially as we anticipate lower interest rates, which typically benefit smaller companies more than the big players. For some context, the S&P 600 (small companies) has rallied an impressive 6.6% this month, while the S&P 500 is up just 0.87% (FactSet).
Looking Ahead
This coming week is packed with important economic data. On Tuesday, the National Association of Realtors will release Existing Home Sales numbers, and on Wednesday, we’ll see New Home Sales data from the US Census Bureau. These reports will give us a better read on the housing market, which has been softening lately. Housing has been one of the economy’s most resilient sectors, playing a big role in keeping inflation higher than we'd like.
On Thursday, we’ll get the initial GDP estimates for the second quarter. The Fed is predicting a growth rate of 2.7%, which is a nice bump from the 1.4% we saw in the first quarter.
Lastly, keep an eye out for the Personal Consumption Expenditures (PCE) index on Friday. This is the Fed's go-to measure for inflation and is expected to mirror the recent Consumer Price Index (CPI) data, which came in lower than expected last week. The result of these inflation results is that the expectations for a .25% rate cut in September are nearly 93% now.
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