What happened last week…
The stock market continued its rally with the three major indices’ weekly performances as follows: DJIA (2.94%), S&P 500 (3.93%), NASDAQ (5.29%). Stocks gained a boost from recent data, such as strong retail sales, fewer weekly jobless claims, and cooling inflation (more below). All three indices are trading above their closing values prior to the stock market dip on August 5, thus recouping their losses. The DJIA landed in the green after two weeks in negative territory while both the S&P 500 and NASDAQ snapped a four-week losing streak. Year-to-date performances are: DJIA (7.88%), S&P 500 (16.45%), NASDAQ (17.46%).
With the market’s recovery, discussions about the size of an interest rate reduction have once again shifted. According to the CME FedWatch Tool, as of August 16, the projected rate cut that could occur in September has shifted back to a 25-basis point cut, rather than a 50-basis point cut, being the most likely scenario with a 72.5% probability.
The inflation rate year-over-year for July beat expectations (3.0%) as it decreased to 2.9% from 3.0%, making it the fourth straight monthly decline and the lowest reading since March 2021 (2.6%). The rate peaked at 9.1% in June 2022. Meanwhile, the core inflation rate year-over-year for July matched expectations as it decreased to 3.2% from 3.3%. It is the lowest reading since April 2021 (3.0%).
Chipotle (CMG) CEO Brian Niccol is leaving the company at the end of this month to take over as CEO of Starbucks. Niccol had been Chipotle’s CEO since 2018 and Chairman of the Board since 2020. Chief Operating Officer Scott Boatwright has been named interim CEO.
According to FactSet, as of August 16, for Q2 2024 the blended earningsfor the S&P 500 is 10.9% and the blended revenue for the index is 5.2%. Looking ahead, Q3 2024 earnings growth is forecasted to be 5.2% with revenue growth of 4.9%. For Q4 2024, earnings growth is projected to be 15.5% with revenue growth of 5.6%.
Happening this week…
The following companies report earnings this week: PANW, LOW, TGT, INTU.
On Thursday, existing home sales for July are expected to remain at 3.89 million, which was the fourth straight monthly decline and the lowest figure this year. On Friday, new home sales for July are expected to increase to 630,000 from 617,000, which was the lowest reading in seven months.
Thanks for Reading!
- The Rockline Team