Weekly Review for week ending 9-20-24
I take pride in personally crafting each of these emails. Unlike many others in the industry who rely on prewritten content, I write these myself from scratch. My goal is to boil down complex concepts and share relevant news in an easy-to-understand format. I hope you find them both informative and enjoyable.
The stock market surged this week in response to the Federal Reserve’s decision to cut interest rates by 0.50%, surprising many who expected a smaller 0.25% reduction. The S&P 500 added 1.55%, hitting an all-time high and breaking through the previous record set on July 16th. Year-to-date, the S&P 500 is up 19.55%. The NASDAQ also had a strong week, gaining 2.57%, though it remains 3.75% below its July 10th high. Year-to-date, the NASDAQ is up 19.56% (FactSet).
It’s my opinion, that while the market reacted positively to the rate cut, the decision to go with a more aggressive 0.50% cut suggests that the Federal Reserve may feel they were behind the curve. It seems like a clear signal that most members of the FOMC felt pressure to act more swiftly. Despite this, Fed Chairman Jerome Powell emphasized that their actions weren’t driven by concerns over economic activity but were focused on adjusting monetary policy1.
Looking Ahead
The Fed’s forward guidance points to additional rate cuts in November and December, as well as four cuts in 2025 and two more in 2026. This accelerated timeline suggests a significant shift from what was projected earlier in the year.
On the economic calendar, all eyes will be on the Personal Consumption Expenditures (PCE) inflation report, which is set to be released this Friday. The most recent data showed a 2.6% annual increase in the PCE Price Index for July, excluding energy and food prices, down from 2.9% in June. The August report will offer further insights into whether inflationary pressures continue to ease.
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Jeremy Raffer, MBA
Director & Wealth Manager
Author “Financial Planning for Widows”
m. 201-747-2705
e. jeremy.raffer@stewardpartners.com
Steward Partners
115 W. Century Rd, Suite 145
Paramus, NJ 07652
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1https://www.federalreserve.gov/newsevents/pressreleases/monetary20240918a.htm