What happened in the markets: Sep 30 - Oct 04, 2024
Aries Yuangga, Wakil Penasihat Berjangka
The first week of October brought volatility to global markets, as investors grappled with a mix of strong economic data and lingering uncertainties in the geopolitical and political landscapes. The S&P 500 ended the week with a modest 0.2% gain, as a surprising U.S. labor market report provided support while geopolitical risks and concerns about the Federal Reserve's future rate cuts created tension. Here's a look at what shaped the markets this past week and what lies ahead.
Last Week at a Glance
The week kicked off with markets on edge due to concerns over a potential East Coast port strike, Middle East tensions, and the approaching U.S. presidential election. However, by Friday, optimism returned. The U.S. September nonfarm payrolls report showed 254,000 new jobs added, significantly beating expectations of 140,000. Unemployment ticked down to 4.1%, signaling that the labor market remains robust, which calmed worries of a slowdown. This data further supported the notion of a "soft landing" for the U.S. economy, where growth cools without tipping into a recession. Moreover, the East Coast port strike, which had threatened to disrupt supply chains and weigh on economic growth, was tentatively resolved mid-week. Dock workers reached a deal with port operators that included a wage increase of 62% over six years, easing the immediate threat to logistics and inflation. Despite the positive domestic news, geopolitical tensions in the Middle East continued to loom over the markets. A missile strike on Israel by Iran led to a spike in oil prices, with West Texas Intermediate (WTI) crude oil climbing more than 10% during the week. The broader commodity markets saw similar price increases as safe-haven assets like gold and Treasury bonds initially gained ground before retreating by Friday.
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:
Rivian (RIVN) 🚗: Rivian fell by over 3% after reporting a supply chain disruption that forced it to cut its production forecast for the rest of the year. Concerns about the electric vehicle market’s growth also weighed on the stock.
Spirit Airlines (SAVE) ✈️: Spirit Airlines plunged nearly 25% following reports that the airline may file for bankruptcy. The struggles stemmed from failed merger talks with JetBlue Airways, which led to concerns over its financial stability.
JetBlue Airways (JBLU) 🛫: JetBlue soared by over 14% in response to Spirit Airlines' bankruptcy talks. The failed merger relieved some competitive pressure in the low-cost airline sector, benefiting JetBlue's stock.
Nvidia (NVDA) 🖥️: The PHLX Semiconductor Index, led by Nvidia, rose by 1.6%. Strong performances in tech and semiconductors, driven by the positive jobs report, helped bolster confidence in the broader economy. Nvidia’s strength highlighted investor optimism for continued growth in the tech space.
Despite stock-specific volatility, the overall market remained resilient, supported by a strong jobs report and easing concerns over the East Coast port strikes. This dynamic helped stocks rebound from earlier worries and pushed indices higher.
The Week Ahead: October 07 - October 11, 2024
Looking forward, several key economic reports are expected to provide further clarity on the direction of the U.S. economy and Federal Reserve policy:
September CPI (Consumer Price Index): Set to be released on Thursday, this data will be closely watched for signs of inflationary pressures. Markets are expecting a year-over-year inflation rate of 2.3%, down from 2.5% in August.
September PPI (Producer Price Index): Scheduled for Friday, the PPI will give insight into wholesale inflation trends, with forecasts pointing to a slight cooling from August's levels.
Fed communications: Throughout the week, speeches from 19 Federal Reserve officials are expected, including from Chair Jerome Powell. Investors will be keen to gauge the Fed’s stance on future rate cuts after the strong labor market data reduced the likelihood of larger rate cuts in November and December.
Key Earnings Reports:
Several major companies are set to release their earnings, giving a glimpse into their recent performance and future outlook.
October 7, 2024: Shell (SHEL)
Shell will report earnings before the market opens. Analysts expect an EPS of $1.88, though the company is seeing a slight decline compared to last year. Last quarter, Shell beat estimates with an EPS of $1.98.October 8, 2024: PepsiCo (PEP)
PepsiCo is also reporting before the market opens. The expected EPS is $2.29, with a solid 6.43% growth compared to last year. In the previous quarter, PepsiCo slightly exceeded estimates with an EPS of $2.28.October 10, 2024: Delta Air Lines (DAL) & Domino’s Pizza (DPZ)
Delta is expected to report during market hours with an estimated EPS of $1.53, though it’s likely to show a decline from last year. Last quarter, Delta missed slightly with an EPS of $2.36.
Domino’s will report pre-market, and analysts expect an EPS of $3.62, up almost 10% from last year. The company has consistently beaten expectations in recent quarters.October 11, 2024: JPMorgan Chase (JPM), Wells Fargo (WFC), and BlackRock (BLK)
JPMorgan and Wells Fargo will report pre-market. JPMorgan is expected to post an EPS of $3.98, with flat growth, but the company beat estimates significantly last quarter. Wells Fargo has an expected EPS of $1.28, showing modest growth. BlackRock has not provided any EPS guidance for this report.
Conclusion
The first week of October brought a mix of market volatility and optimism, with strong U.S. labor data easing recession fears while geopolitical tensions and Fed uncertainty lingered. Stocks like Rivian and Spirit Airlines faced sharp declines due to company-specific issues, while Nvidia and JetBlue gained. Despite early concerns over a potential port strike and Middle East tensions, the market showed resilience, supported by robust economic fundamentals. Looking ahead, key economic reports like the CPI and PPI, along with major earnings from companies such as Shell, PepsiCo, and JPMorgan, will provide further insights into inflation and growth trends.
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.
