What happened in the markets : 09 September - 13 September 2024
Aries Yuangga, Wakil Penasihat Berjangka
The past week saw heightened market activity as investors grappled with inflation data, market volatility, and anticipation of Federal Reserve decisions on interest rates. Despite some swings, the overall performance of the market was strong, with key indexes posting gains. A surge in tech stocks, combined with rate cut expectations, has kept investor sentiment buoyant. This article will break down the key events of last week, highlight major stock movers, and offer insights on what to expect in the week ahead.
Last Week at a Glance
Between September 9 and 13, 2024, U.S. markets were characterized by growing anticipation of a potential Federal Reserve rate cut, alongside continued inflation concerns. The Dow Jones Industrial Average (DJIA) rose by 2.6%, closing at 41,394. Similarly, the S&P 500 climbed 4.0%, reaching 5,626, while the NASDAQ posted an impressive 6.0% jump, settling at 17,684 by Friday. This marked the fifth consecutive positive session for the week, bolstered by hopes of a sizable rate cut in the upcoming Federal Open Market Committee (FOMC) meeting. Investors closely watched inflation figures, as the latest Core Consumer Price Index (CPI) report showed an annual inflation rate of 3.2%. While this was a sign of progress from inflation’s peak in 2022, it was still above the Federal Reserve’s 2% target, suggesting more work ahead in the inflation fight. The report further indicated that shelter prices, particularly rents and home prices, were responsible for much of the persistent inflationary pressure. Market volatility increased midweek, with the Dow registering a 910-point intraday swing last Wednesday. However, despite this short-term turbulence, broader market sentiment remained optimistic, with stocks near record highs.
Top movers & shakers🎢
Several individual stocks made headlines with significant price movements driven by a variety of factors, including quarterly earnings reports, analyst ratings, and strategic announcements. Among the notable movers were:
Nvidia (NVDA) 💻: Nvidia shares soared by nearly 10% as strong earnings and positive forward guidance lifted investor sentiment. CEO Jensen Huang’s bullish remarks on AI developments further fueled optimism, making Nvidia a standout in the tech rally.
Oracle (ORCL) 📈: Oracle surged 7.5%, buoyed by a robust earnings report and excitement surrounding its AI-driven cloud initiatives. The company’s cloud segment growth continued to impress, attracting heavy investor interest.
Adobe (ADBE) 📉: Adobe dropped 8% after issuing weaker-than-expected revenue guidance for Q4. Despite beating third-quarter earnings estimates, its cautious outlook triggered a selloff among investors.
Boeing (BA) ✈️: Boeing faced a 3.6% decline, impacted by employee strike threats that could disrupt production schedules. Concerns about labor unrest weighed heavily on the stock’s performance.
RH (RH) 🛋️: RH experienced a massive 22% jump, driven by better-than-expected earnings and a positive outlook on luxury home furnishings. The company’s strong positioning in the high-end market helped push its stock higher.
The Week Ahead: September 16 - 20, 2024
Looking ahead, the upcoming week will feature critical economic data releases and central bank meetings that could significantly influence market movements.
September 17: Retail Sales (August) 🛍️ – Retail Sales data will provide a snapshot of consumer demand in the U.S. economy. This report is crucial to assess whether spending remains robust, despite inflationary pressures.
September 18: FOMC Meeting 🏦 – The Federal Reserve's interest rate decision is the most anticipated event of the week. Investors are divided between a 25-basis-point (0.25%) cut and a 50-basis-point (0.5%) cut. Regardless of the exact rate, markets are widely expecting the start of a rate-cutting cycle, which could bring a fresh boost to equities.
September 18: Housing Starts & Building Permits 🏗️ – As mortgage rates climb, the state of the housing market remains a key focus. This data will reveal the pace of new construction and offer insights into future housing supply.
September 19: Existing Home Sales 🏠 – Following housing starts, the Existing Home Sales report will provide further information on the housing market’s supply and demand dynamics. Investors will watch this closely, especially as rising mortgage rates impact buyer activity.
September 20: Leading Indicators (August) 📈 – This report will give a glimpse of future economic activity, helping investors gauge the outlook for growth in the coming months.
Additionally, keep an eye on central bank meetings in the U.K. and Japan, as the Bank of England and the Bank of Japan provide updates on their monetary policies, potentially adding to global market volatility.
Key Earnings Reports
The earnings season is gearing up with several notable companies set to release their reports, offering valuable insights into different sectors of the economy.
September 17, 2024: FedEx (FDX) ✈️ – FedEx will release its earnings, serving as a bellwether for consumer demand and global trade. Investors are eager to see how the shipping giant is navigating changing demand patterns in a high-inflation environment. Its guidance will provide important clues about the health of the logistics and shipping sectors.
September 18, 2024: Lennar (LEN) 🏡 – The homebuilder Lennar’s earnings will offer critical insights into the housing market, especially as mortgage rates remain elevated. With the homebuilding sector under pressure, Lennar’s results and future outlook will be closely monitored by investors interested in real estate and housing trends.
September 19, 2024: Darden Restaurants (DRI) 🍽️ & Cracker Barrel (CBRL) 🛖 – Both Darden and Cracker Barrel will report earnings this week, providing a snapshot of consumer behavior in the restaurant sector. As dining habits shift amid inflationary pressures, investors will be looking for guidance on how these companies are maintaining margins and managing consumer demand.
Conclusion
The past week showcased a strong market performance fueled by optimism over potential Federal Reserve rate cuts and a rally in tech stocks. Inflation concerns persisted, but investors remained optimistic as key indexes posted gains. Heading into the next week, attention will shift to crucial economic data such as Retail Sales and the FOMC meeting, where interest rate decisions could impact market direction. Additionally, earnings reports from companies like FedEx and Lennar could provide further insights into global trade and the housing market. Overall, market sentiment appears cautiously optimistic, but volatility remains a key risk.
Source:
https://www.schwab.com/learn/story/schwab-market-update
https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update
*Disclaimer:
This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.
