What happened in the markets: Oct 07 - Oct 11, 2024
Aries Yuangga, Wakil Penasihat Berjangka
The second week of October marked a significant milestone as the bull market celebrated its two-year anniversary, with U.S. stock indices closing at new highs. Fueled by solid corporate earnings and easing inflation data, investors remain cautiously optimistic about the future, even as valuations reach elevated levels. The week also featured several high-profile corporate earnings reports and inflation data that kept the market momentum alive.
Last Week at a Glance
From October 7–11, 2024, U.S. markets extended their bullish trend, driven by key economic releases and corporate earnings reports. The S&P 500 rose 1.1% to close at a record high of 5,815, up over 60% since the October 2022 low. The Dow Jones Industrial Average gained 1.2%, ending the week at 42,864, while the Nasdaq Composite increased by 1.1% to reach 18,343. The week’s performance was buoyed by strong financial sector earnings and easing inflation concerns, which allayed investor fears of aggressive Federal Reserve action. Geopolitical risks and the upcoming U.S. presidential election remain potential sources of volatility, but so far, the bull market continues its upward trajectory. While the market enjoyed new highs, the rally was broad-based, with around 75% of S&P 500 components trading above their 200-day moving averages. This is a healthy sign of market breadth, indicating strength across multiple sectors rather than dependence on a few large-cap names.
Top movers & shakers🎢
Several stocks made headlines last week with significant price movements due to a combination of company announcements, analyst ratings, and specific market conditions. Notable movers include:
Tesla (TSLA) 🚗: Tesla's stock tumbled nearly 9% after the much-anticipated “Robotaxi” event left investors disappointed. The absence of a clear release timeline for Tesla’s autonomous vehicle, expected by 2027, coupled with concerns over near-term profitability, weighed heavily on the stock.
JPMorgan Chase (JPM) 🏦: Shares of JPMorgan Chase rose by 4.44%, fueled by better-than-expected earnings. The bank posted a strong net-interest income (NII) of $23.4 billion and raised its NII guidance for 2024, driving investor optimism about its ability to navigate the current rate environment.
Wells Fargo (WFC) 💸: Wells Fargo rallied by 5.61% after reporting strong earnings that beat analysts' expectations. Despite a slight decline in NII due to shifts in customer deposits, the bank’s management expressed confidence in a robust fourth-quarter outlook, further boosting the stock.
Uber (UBER) & Lyft (LYFT) 🚕: Both ride-hailing giants saw their stock prices jump by around 10%, reacting positively to Tesla's event. Investors were relieved that the autonomous vehicle threat, posed by Tesla, is still years away, allowing Uber and Lyft some breathing room to grow in the short term.
Domino’s Pizza (DPZ) 🍕: Domino's shares climbed more than 5% despite missing revenue expectations. The company’s earnings beat, combined with slight growth in same-store sales, reassured investors that the pizza chain is making progress in its competitive fast-food market share efforts.
The Week Ahead: October 14 - October 18, 2024
Next week promises another action-packed series of events, with crucial economic releases and earnings reports likely to drive market sentiment. The major highlight will be U.S. retail sales data for September, scheduled for Thursday. Any signs of weakening consumer demand could raise fresh concerns about the strength of the U.S. economy, though recent reports have been strong. Other key economic indicators to watch include building permits, which will shed light on the health of the housing market. With mortgage rates at elevated levels, a potential slowdown in housing could signal a broader economic cooling.
Key Earnings Reports
Several major companies are set to release their earnings, giving a glimpse into their recent performance and future outlook.
Netflix (NFLX) 📺: Investors are keen to hear about Netflix’s subscriber growth, especially in its new ad-supported tier. The company’s ability to maintain growth amid increased competition in the streaming space will be a focal point during its earnings release.
Bank of America (BAC) & Citigroup (C) 🏦: Both financial giants are set to provide critical insight into the health of the banking sector. Investors will watch closely for updates on net-interest income and how each bank is managing through the current interest rate environment.
United Airlines (UAL) ✈️: United Airlines’ earnings will shed light on travel demand and the impact of rising fuel costs. With fluctuating oil prices and post-pandemic travel dynamics, the company’s outlook will be of significant interest.
Johnson & Johnson (JNJ) 💊: J&J’s earnings report is expected to focus on its pharmaceutical pipeline, particularly any updates on drug approvals or trials. Investors will also look for information on how the company is handling recent challenges in its consumer health division.
American Express (AXP) 💳: Analysts will be paying close attention to consumer spending trends and credit conditions, as American Express provides insights into how its customers are navigating the current economic environment. This report will be crucial for understanding broader consumer financial health.
Conclusion
The second week of October saw U.S. markets hit new highs, driven by strong corporate earnings and easing inflation concerns. The S&P 500, Dow Jones, and Nasdaq all posted gains, reflecting investor optimism despite elevated valuations and looming geopolitical risks. Notable stock movements included Tesla’s decline following a lackluster event and rallies in financials like JPMorgan and Wells Fargo. With key earnings reports and economic data ahead, including U.S. retail sales and housing indicators, market sentiment will hinge on signs of consumer strength and sector performance as the bull market momentum continues into its third year.
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.
