Last week saw further gains in the U.S. stock market, with the S&P 500 and Dow Jones Industrial indices reaching new all-time highs. These gains were driven by several factors, including stronger-than-expected economic growth. Notably, third-quarter earnings reports from key financial institutions like JPMorgan and Wells Fargo exceeded expectations. Over-all year-over-year earnings growth for the S&P 500 was projected at just over 4% by the end of last week, but considering (1) the current economic momentum and (2) the historical trend of actual earnings beating estimates (about 80% of the time over the past four years), we may see an even stronger figure.

Adding to the positive sentiment, the Atlanta Fed’s GDPNow model raised its Q3 GDP projection to 3.2%, up from 2.5% the previous week. However, not all economic data was encouraging. Inflation data delivered mixed results, with the Consumer Price Index (CPI) slightly higher than expected, while the Producer Price Index (PPI) came in slightly below expectations.

Looking ahead, election news will dominate headlines this week, given the tight race reflected in recent polls. It is also a heavy week for earnings, with key financial firms set to report their results. On the economic front, the calendar is relatively light, with the most significant release being September Retail Sales on Thursday.

Two additional observations:

  1. Rising Volatility: Stock market volatility is picking up amid election uncertainty. This trend may persist until there is more clarity on the outcome. For more insights on the election, visit the Brinker Capital Election website at www.orion.com/election-2024 for the latest data, commentary, and analysis.
  2. Investor Sentiment: Despite the uncertainty, investor sentiment remains surprisingly positive. The latest AAII Sentiment Survey, released late last week, recorded the lowest percentage of bearish investors in nearly a year, dating back to December. Historically, when sentiment reaches similar levels, the market tends to deliver below average but still positive returns over the following 12 months.

Bottom line...

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!


 

Get Your Own Market Commentary

Client-Friendly Weekly Wire

Want a version of Weekly Wire you can send directly to your clients? Subscribe to our Weekly Wire newsletter and get a client-friendly version every Monday. Simply download, add your firm's logo, and use with your clients!

Subscribe Now

 

Key Data

Stocks, Bonds, Alternatives, and Real Assets as of October 11, 2024

Security Name

Risk Score

1 Wk

1 Mo

QTD

YTD

1 Yr

3 Yr Ann.

Global Equities (60% US, 40% Intl)

100

0.58%

4.94%

-0.03%

18.25%

29.72%

7.93%

S&P 500 Total Return

102

1.13%

4.82%

0.96%

23.25%

34.80%

11.79%

Dow Jones Industrial Average

97

1.22%

5.01%

1.31%

15.42%

29.32%

9.73%

NASDAQ 100 Total Return

122

1.19%

5.45%

1.08%

21.26%

34.12%

12.21%

TV Benchmark

107

1.18%

5.09%

1.12%

19.98%

32.75%

11.24%

Morningstar US Large Cap

102

1.23%

4.85%

1.12%

25.26%

36.69%

12.26%

Morningstar US Mid Cap

113

1.12%

5.54%

0.92%

15.60%

28.86%

6.03%

Morningstar US Small Cap

125

1.07%

6.99%

0.72%

11.28%

27.02%

3.97%

Morningstar US Value

98

0.98%

4.32%

0.93%

17.45%

29.30%

11.16%

Morningstar US Growth

126

2.13%

6.58%

2.05%

18.46%

32.92%

3.53%

MSCI ACWI Ex USA 

98

-0.35%

4.97%

-1.52%

12.96%

23.39%

3.99%

MSCI EAFE 

101

0.26%

2.92%

-1.99%

11.24%

22.15%

5.39%

MSCI EM

98

-1.66%

9.72%

-0.94%

16.13%

24.79%

0.16%

Bloomberg US Agg Bond Index

27

-0.46%

-1.83%

-1.46%

2.93%

9.77%

-1.70%

Bloomberg Commodity Index

70

-1.16%

7.47%

0.60%

6.50%

3.16%

3.21%

Wilshire Liquid Alternative Index

25

0.06%

0.67%

-0.32%

5.99%

9.87%

2.15%

US Dollar

10

0.98%

1.34%

2.19%

1.63%

-2.68%

3.07%

Bloomberg US Treasury Bill 1-3mo

1

0.10%

0.45%

0.17%

4.26%

5.53%

3.63%

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 11, 2024

Rate

This Week

1 Wk Δ%

13-Wk Treasury Yield

4.52%

0.01%

10-Yr Treasury Yield

4.07%

0.09%

Bloomberg US Agg Yield

4.57%

0.06%

Avg Money Mkt Yield

4.71%

-0.03%

Avg 30-Yr Mortgage Rate

6.25%

0.04%

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

 

 

Key Economic Data Last Week

Data Point

Expectation

Actual

Consumer Credit

$13.2B

$8.9B

Consumer Price Index (CPI) YoY

2.3%

2.2%

Core CPI YoY

3.2%

3.3%

Producer Price Index (PPI) YoY

--

1.8%

Core PPI YoY

--

3.2%

Source: MarketWatch,  First Trust

 

 

Key Economic Data This Week

Data Point

Expectation

Release Date

US Retail Sales

0.3%

10/17/24

Housing Starts

1.34M

10/18/24

Source: MarketWatch

 

More Just for You

Want More Resources?

Unlock a wealth of market commentary resources from Rusty Vanneman, Chief Investment Strategist, and his team.

Explore More
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.
The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org.
The CMT Program demonstrates mastery of a core body of knowledge of investment risk in portfolio management. The Chartered Market Technician® (CMT) designation marks the highest education within the discipline and is the preeminent designation for practitioners of technical analysis worldwide. To learn more about the CMT, visit https://cmtassociation.org/.
Think2perform’s Behavioral Financial Advice program integrates traditional finance practices with psychology and neuroscience to improve emotional competency and decision-making behavior that increases effective usage of the financial plan with clients. To obtain the Behavioral Financial Advisor (BFA) designation, participants must complete a self-directed course, which takes 20-30 hours to complete, and includes a mix of interactive exercises, videos and case studies. To learn more about the BFA, visit https://www.think2perform.com.
Wealth Management services offered through Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor.