Last week continued the market's ongoing trends and narratives, marking the sixth consecutive week of gains for the U.S. stock market and bringing more all-time highs. We also saw further evidence of stronger-than-expected economic performance, including Netflix’s positive third-quarter earnings results last Friday. Meanwhile, the upcoming presidential election remains a key driver of analysis and speculation in the financial press.

What makes these recent gains notable is that September and October are historically challenging months for the stock market, compounded this year by an uncertain and closely contested election. Additionally, one of the more positive short-term drivers for the market has been the expectation of deeper and faster interest rate cuts by the Federal Reserve. While the Fed did cut rates by 0.5% last month, the pace and depth of cuts have been less aggressive than anticipated, partly due to stronger economic growth. For instance, last week the Atlanta Fed’s GDPNow model raised its Q3 GDP projection yet again to 3.4%, up from 3.2% the previous week.

Looking ahead, this week marks the peak of the third-quarter earnings season, and we can also expect an influx of campaign ads as the election approaches. Economic data releases this week include housing sales and durable goods. As for the broader outlook in the coming weeks and months, the U.S. economy appears to have enough momentum to withstand any pre-election economic pause, as some firms hold off on major commitments until the election outcome is clear. Additionally, certain data may show anomalies due to the ongoing impacts from Hurricanes Helene and Milton.

Momentum in both the economy and markets remains positive as we head into the final months of 2024. Another encouraging short-term factor is the seasonal trend now turning in favor of the market as late October marks the beginning of one of the historically strongest three-month periods for stock market performance.

On another positive note, although some argue that short-term interest rates are restrictive given their nominal levels above current inflation, overall financial conditions remain supportive of the economy and markets. Both fiscal and monetary policies have injected substantial liquidity into the system. Stocks are at all-time highs, corporate bonds are in high demand, and it’s not just stocks—gold is also at all-time highs, and Bitcoin is approaching similar levels. Additionally, private net worth is also hitting new records, reinforcing a virtuous cycle.

Bottom line, despite the negative headlines dominating the news, the overall economic and market backdrop remains positive. In turn...
 

Stay invested. Stay diversified. Stay disciplined.

 

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 October 18, 2024

Security Name

Risk Score

1 Wk

1 Mo

QTD

YTD

1 Yr

3 Yr Ann.

Global Equities (60% US, 40% Intl)

100

0.43%

3.56%

0.39%

18.75%

32.46%

7.18%

S&P 500 Total Return

102

0.87%

4.48%

1.84%

24.33%

37.92%

11.06%

Dow Jones Industrial Average

97

0.98%

4.34%

2.30%

16.55%

31.12%

9.29%

NASDAQ 100 Total Return

122

0.26%

5.11%

1.34%

21.57%

37.46%

10.85%

TV Benchmark

107

0.70%

4.64%

1.83%

20.82%

35.50%

10.40%

Morningstar US Large Cap

102

0.74%

4.62%

1.87%

26.18%

39.60%

11.40%

Morningstar US Mid Cap

113

1.35%

4.39%

2.28%

17.16%

33.31%

5.39%

Morningstar US Small Cap

125

1.44%

4.18%

2.17%

12.89%

31.81%

3.56%

Morningstar US Value

98

1.08%

3.45%

2.02%

18.71%

30.98%

11.15%

Morningstar US Growth

126

0.86%

5.51%

2.92%

19.47%

37.76%

2.17%

MSCI ACWI Ex USA 

98

-0.26%

2.40%

-1.77%

12.67%

25.33%

3.29%

MSCI EAFE 

101

-0.37%

0.47%

-2.36%

10.82%

24.15%

4.66%

MSCI EM

98

-0.37%

6.32%

-1.31%

15.71%

26.11%

-0.42%

Bloomberg US Agg Bond Index

27

0.05%

-1.67%

-1.41%

2.98%

12.08%

-1.79%

Bloomberg Commodity Index

70

-2.46%

1.54%

-1.87%

3.87%

-2.20%

2.06%

Wilshire Liquid Alternative Index

25

0.37%

0.58%

0.05%

6.38%

10.66%

2.08%

US Dollar

10

0.81%

2.91%

3.02%

2.46%

-2.28%

3.39%

Bloomberg US Treasury Bill 1-3mo

1

0.08%

0.41%

0.25%

4.34%

5.50%

3.66%

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 October 18, 2024

Rate

This Week

1 Wk Δ%

13-Wk Treasury Yield

4.51%

-0.01%

10-Yr Treasury Yield

4.07%

0.00%

Bloomberg US Agg Yield

4.57%

0.00%

Avg Money Mkt Yield

4.68%

-0.03%

Avg 30-Yr Mortgage Rate

6.51%

0.26%

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

 

 

Key Economic Data Last Week

Data Point

Expectation

Release Date

US Retail Sales

0.3%

0.4%

Housing Starts

1.35M

1.35M

Source: MarketWatch,  First Trust

 

 

Key Economic Data This Week

Data Point

Expectation

Release Date

US Leading Economic Indicators

-0.3%

10/21/24

Existing Home Sales

3.83M

10/23/24

New Home Sales

720,000

10/24/24

Durable Goods Orders

-1.0%

10/25/24

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.
An index is an unmanaged group of assets considered to be representative of a select segment or segments of the market in general, as determined by the index manager for the purposes of managing a specific index. You cannot invest directly in an index.
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