Last week started strong but did not finish that way. On Monday, the post-election “Trump Bump” propelled markets to fresh all-time highs, with the S&P 500 surpassing 6,000 for the first time. However, by week’s end, the market experienced what some are calling a “Trump Fade,” capped off by sharp losses on Friday. The S&P 500 ended the week down 2%, led lower by technology stocks, with the tech-heavy NASDAQ falling 3%. The bond market also faced losses as 10-year Treasury yields rose, closing above 4.4%.

Inflation was a key driver of market declines. Both core consumer prices (excluding food and energy) and producer prices continue to rise more than 3% year-over-year—well above the Federal Reserve’s 2% target. Inflation expectations also rose last week. With inflation data ticking higher, expectations for the Fed to cut short-term interest rates were scaled back. Fed Chair Jerome Powell reinforced this outlook, stating late last week that the economy is “not signaling a need for the Fed to hurry rate cuts.” He added that if economic data suggests moving slower, “it seems like the right thing to do.”

We are also nearing the end of the third-quarter earnings season, and while there has been growth, results have been slightly underwhelming. While most companies have exceeded expectations, the “beat rate” (how often companies exceed forecasts) is below average. Moreover, companies typically beat expectations by over 8% on average in the past five years—but this season, that figure has been cut in half. In other words, fewer companies than usual are reporting results that exceed Wall Street’s expectations.

Looking ahead, the spotlight is on Nvidia’s earnings report, scheduled for Wednesday. Expectations are sky-high, with forecasts for year-over-year earnings and revenue growth exceeding 80%! Given Nvidia’s significant impact on the economy this year, Nvidia’s upcoming report could shed light on how the tech industry is adapting to AI demand, which has been a major driver of the stock market this year.

We will also see key housing market data this week. With rising mortgage rates, housing is expected to face continued challenges, which will be closely watched by investors.

Lastly, a note on inflation trends. Despite concerns about inflation, two key markets are signaling otherwise. The US dollar hit a two-year high last week, reversing losses from earlier in the year and climbing over 10% in 2024, driven by rising long-term interest rates. Meanwhile, oil prices fell again and are approaching their lowest levels of the year—close to levels not seen since 2021.

What does this mean for your portfolio? While market swings can feel unsettling, they are part of the long-term investment journey. Your diversified portfolio is designed to weather these changes. As the year winds down, it is important to stay focused on your long-term goals and not get caught up in short-term market fluctuations or headlines. Staying invested, maintaining diversification, and keeping a disciplined approach are key for navigating these markets.

If you have any questions or comments, please let us know at strategists@brinkercapital.com or at rusty@orion.com. Thank you for your time and trust. See you next week!

 

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Key Data

Stocks, Bonds, Alternatives, and Real Assets as of November 15, 2024

Security Name

Risk Score

1 Wk

1 Mo

QTD

YTD

1 Yr

3 Yr Ann.

Global Equities (60% US, 40% Intl)

100

-2.42%

-1.22%

-1.40%

16.62%

24.56%

5.38%

S&P 500 Total Return

102

-2.05%

1.05%

2.03%

24.56%

32.22%

9.52%

Dow Jones Industrial Average

97

-1.17%

1.76%

2.79%

17.11%

26.59%

8.57%

NASDAQ 100 Total Return

122

-3.41%

1.21%

1.74%

22.05%

29.96%

8.90%

TV Benchmark

107

-2.21%

1.34%

2.19%

21.24%

29.59%

9.00%

Morningstar US Large Cap

102

-2.21%

1.05%

2.08%

26.44%

33.52%

9.91%

Morningstar US Mid Cap

113

-1.32%

2.14%

3.47%

18.52%

30.20%

4.41%

Morningstar US Small Cap

125

-2.72%

2.21%

3.37%

14.20%

27.70%

2.21%

Morningstar US Value

98

-0.96%

0.15%

1.48%

18.09%

27.12%

9.85%

Morningstar US Growth

126

-2.86%

3.87%

5.73%

22.73%

33.65%

1.26%

MSCI ACWI Ex USA 

98

-2.95%

-5.01%

-6.90%

6.79%

13.84%

0.83%

MSCI EAFE 

101

-2.57%

-5.47%

-7.66%

4.81%

12.46%

1.86%

MSCI EM

98

-4.44%

-5.55%

-7.23%

8.76%

13.58%

-2.58%

Bloomberg US Agg Bond Index

27

-0.85%

-1.87%

-2.98%

1.33%

7.12%

-2.23%

Bloomberg Commodity Index

70

-1.98%

-1.97%

-3.67%

1.97%

-2.05%

1.58%

Wilshire Liquid Alternative Index

25

-0.51%

0.00%

-0.25%

6.06%

9.16%

1.80%

US Dollar

10

2.07%

3.27%

5.85%

5.27%

2.52%

3.89%

Bloomberg US Treasury Bill 1-3mo

1

0.08%

0.43%

0.62%

4.72%

5.44%

3.78%

Source: Morningstar

The TV Benchmark represents an average of the S&P 500, Dow Jones IA, and NASDAQ 100 return indexes. The Orion Risk Score represents risk relative to the global equity market.

 

 

Interest Rates as of November 15, 2024

Rate

This Week

1 Wk Δ%

13-Wk Treasury Yield

4.39%

-0.03%

10-Yr Treasury Yield

4.43%

0.12%

Bloomberg US Agg Yield

4.89%

0.13%

Avg Money Mkt Yield

4.49%

-0.13%

Avg 30-Yr Mortgage Rate

6.91%

0.02%

Sources: Yahoo Finance, S&P Global, Crane Data, BankRate

 

 

Key Economic Data Last Week

Data Point

Expectation

Actual

Consumer Price Index (CPI) YoY

2.6%

2.6%

Core CPI YoY

3.3%

3.3%

Producer Price Index (PPI)

--

2.4%

Core PPI YoY

--

3.5%

US Retail Sales

0.3%

0.3%

Source: MarketWatch,  First Trust

 

 

Key Economic Data This Week

Data Point

Expectation

Release Date

Housing Starts

1.34M

11/18/24

Existing Home Sales

3.91M

11/21/24

Leading Economic Indicators

-0.4%

11/21/24

Source: MarketWatch

 

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The views expressed herein are exclusively those of Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments, a registered Investment Advisor, and are not meant as investment advice and are subject to change. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation, and the particular needs of any specific person.
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