Weekly Market Commentary 09.23.2024

Jimmy Lee | Sep 23, 2024

Categories

The Markets

Rates moved lower and stocks moved higher.

In 2022, the United States Federal Reserve (Fed) began raising interest rates as it battled high rates of inflation. That year prices rose 8 percent, as measured by the Consumer Price Index. In 2023, prices increased more slowly (4.1 percent), but still advanced at a pace that was well above the Fed’s target of two percent. Last month, prices rose 2.5 percent annualized. And last week, the Fed decided it is time to change course.

“On Wednesday, policymakers indicated their rate cut would likely be the first of several through the end of next year. The median forecast among members of the Federal Open Market Committee was that the benchmark federal-funds rate will be at 3.4 [percent] by the end of 2025, compared with the current targeted range of 4.75 [percent] to 5 [percent],” reported Elizabeth O’Brien and Shaina Mishkin of Barron’s. “This marks a significant shift. The Fed has moved from a phase when it kept rates high to combat inflation to one where it is lowering them to support the labor market and the broad economy.”

As borrowing costs move lower, other interest rates are likely to follow. As a result, consumers, investors, and business owners may have opportunities to:

Pay lower interest rates on auto and home loans,
Refinance mortgages at lower rates, and
Tap into home equity at a lower cost.

Major U.S. stock indices rose on Thursday, following the Fed’s rate cut. “The S&P 500 climbed 1.7 [percent]—notching its 39th record in 2024 and extending this year’s surge to about 20 [percent],” reported Rita Nazareth of Bloomberg. “The Fed’s bold start to cutting interest rates and its determination not to fall behind the curve re-ignited hopes the central bank will be able to avoid a recession. Data Thursday showing a slide in jobless claims to the lowest since May signaled the labor market remains healthy despite a slowdown in hiring.”

Stocks gave back some gains on Friday but finished week higher. Yields on U.S. Treasuries were mixed over the week.

Data as of 9/20/24	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 Index	1.4%	19.6%	29.5%	9.4%	13.8%	11.1%
Dow Jones Global ex-U.S. Index	1.0	8.3	14.7	-0.4	4.2	2.3
10-year Treasury Note (yield only)	3.7	N/A	4.4	1.3	1.8	2.6
Gold (per ounce)	1.2	25.4	34.1	14.0	11.7	7.9
Bloomberg Commodity Index	2.1	-0.5	-8.5	0.7	4.4	-1.9

_{S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.}

_{Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.}

_{Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.}

You’re Talking My Language! They say the only constant is change, and that’s certainly the case when it comes to language. Pronunciations, meanings and syntax often change gradually. However, some changes, especially when it comes to vocabulary, occur quite quickly. For instance, “social media,” “content curation,” and “influencers” are recent additions to the lexicon of American English. There is one aspect of language that has been modified by every generation—slang. See what you know about generational jargon by engaging with this brief quiz.

Which term describes a person who is pretending to be someone else while chatting online?
1. Goat
2. Catfish
3. Chameleon
4. Octopus
In the 1950s, when something was “radioactive,” it was:
1. Exhausting
2. Toxic
3. Popular
4. Crazy
Which of these is not a choice example of 1980s slang?
1. Wannabe
2. Not even
3. Psych
4. Bae
When you give someone the side-eye, what are you doing?
1. Looking at them with suspicion
2. Checking them out without being obvious
3. Flirting with them
4. Admiring their clothing or accessories
If you’re feeling resentful or bitter, someone might accuse you of being:
1. Blue
2. Salty
3. Sus
4. Delulu