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Ahead of Wall Street
Friday, September 20th, 2024
We still have an entire trading day left for this week, but it feels as though we’ve already finished getting through something big. And, of course, we have: the new Fed cycle of easing interest rates began Wednesday — with a 50 basis-point (bps) cut, instead of a mere 25 bps — after a year and a half of raising rates, sometimes aggressively, and another year-plus of remaining at the highest levels in decades.
Market indexes are mildly mixed at this hour, after a 500-points gain on the Dow and a +2.5% surge on the Nasdaq, bringing the tech-heavy index back into the green for the past trading month. The Dow is +28 points at this hour, the S&P 500 is -4, the Nasdaq -19 and the small-cap Russell 2000 -3 points.
What to Expect for the Stock Market Next Week
While it feels like the end — which it is: the end of summer — we keep going with economic reports next week. Among the industries gleaning new information will be Housing: Case-Shiller home prices for July come out Tuesday, New Home Sales on Wednesday and Pending Home Sales Thursday.
Otherwise, we’ll see S&P flash PMI for September in Manufacturing and Services on Monday, Durable Goods Orders on Thursday, along with Weekly Jobless Claims, and the second revision to Q2 GDP. The last revision brought us up to +3.0% on GDP for the second quarter of 2024.
PCE Report Comes Out Next Friday
The Fed’s preferred measure of inflation, Personal Consumption Expenditures (PCE), release August results a week from today. Even though last time around they had not yet achieved the optimum level of +2% inflation, results were moderate: +0.2% headline month over month, +2.5% year over year, and +2.6% core year over year.
The +2.5% level moves us back down to where we started the year, and nearly 3x lower than the +7.117% rate of PCE growth we saw back in June 2022. But that was back in the days of +75 bps rate hikes; we hadn’t even gotten to a +2% Fed funds rate by that point.
Aside from lowering interest rates to 4.75-5.00% this week, the Fed also signaled there are more cuts to come — both in the final two Fed meetings of the year and beyond. So whether another 50 bps cut can be expected early November — the same week as the General Election — or we come down to 25 can start being tracked as of next week’s PCE report.
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Stocks On The Move
| Company | Symbol | Price | $Change | %Change |
|---|---|---|---|---|
| Centrus Energy Corp. | LEU | 45.01 | 3.56 | 8.59 |
| Powell Industries, Inc. | POWL | 206.34 | 13.57 | 7.04 |
| Rockwell Medical, Inc. | RMTI | 4.40 | 0.26 | 6.15 |
| Synchronoss Technologies, Inc. | SNCR | 13.47 | 0.76 | 5.98 |
| Sinclair, Inc. | SBGI | 14.67 | 0.61 | 4.34 |
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