Last week marked the best performance of the year for 2024, with all five trading days finishing in positive territory. Technology stocks, which had lagged the previous week, rebounded sharply and led the market higher. The NASDAQ posted an impressive near 6% return, while the S&P 500 gained over 4%.

One notable example of this turnaround was Nvidia. The previous week, Nvidia experienced the largest weekly loss in stock market capitalization history. However, they quickly recovered those losses last week. Nvidia is no stranger to setting records in market cap changes, holding five of the top ten spots for one-day gains and eight of the top ten for one-day losses. Given this history, continued volatility should not come as a surprise.
Last week’s key economic release was the Consumer Price Index (CPI). Headline inflation now stands at 2.5% year-over-year, but beneath the surface, the story is more complex. When excluding energy and the often-volatile food prices, “core” inflation came in hotter than expected, with a year-over-year increase of 3.2%.

Additionally, the Fed’s closely watched “Supercore” category, which focuses on inflation in the service sector by excluding food, energy, other goods, and housing rents, rose to 4.5% year-over-year. This is higher than the 4.0% recorded in August 2023, signaling persistent inflationary pressures in key areas.

This week, we’ll get a clearer picture of consumer health with the latest Retail Sales data, along with new housing market figures due on Tuesday and Thursday. The highlight of the week, however, will be the Federal Reserve’s anticipated interest rate cut on Wednesday, which would be the first since early 2020. This current cycle marks the longest period the Fed has maintained rates at their peak before cutting.

As we approach the decision, the consensus is divided on whether the Fed will cut rates by 0.25% or 0.50%. The argument for a 0.25% cut is rooted in the persistence of core inflation (excluding food and energy), which remains stubbornly high. On the other hand, the case for a 0.50% cut comes from the weakening labor market. The trend in the unemployment rate moving higher this year is particularly concerning, as the pace of its rise has historically been a reliable indicator of an approaching recession. In summary, while unemployment remains low and both economic and earnings growth have shown resilience, the probability of a recession is increasing.

Add it all up...

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 September 13, 2024

Security Name

Risk Score

1 Wk

1 Mo

QTD

YTD

1 Yr

3 Yr Ann.

Global Equities (60% US, 40% Intl)

100

2.91%

3.78%

3.64%

14.66%

23.43%

5.83%

S&P 500 Total Return

102

4.06%

3.69%

3.33%

19.13%

27.80%

9.68%

Dow Jones Industrial Average

97

2.62%

4.38%

6.26%

11.35%

22.07%

8.06%

NASDAQ 100 Total Return

122

5.96%

2.78%

-0.69%

16.67%

28.22%

9.04%

TV Benchmark

107

4.21%

3.62%

2.97%

15.72%

26.03%

8.93%

Morningstar US Large Cap

102

4.40%

3.57%

2.66%

20.96%

29.53%

9.95%

Morningstar US Mid Cap

113

3.03%

4.31%

5.82%

11.38%

21.90%

4.33%

Morningstar US Small Cap

125

3.53%

3.70%

5.09%

7.03%

18.53%

2.26%

Morningstar US Value

98

1.30%

3.60%

6.49%

13.75%

21.30%

10.17%

Morningstar US Growth

126

5.66%

4.38%

2.15%

13.34%

24.09%

0.54%

MSCI ACWI Ex USA 

98

1.23%

3.70%

3.76%

10.02%

18.22%

1.91%

MSCI EAFE 

101

1.21%

4.53%

4.55%

10.56%

19.60%

3.67%

MSCI EM

98

0.80%

1.31%

0.54%

8.26%

14.38%

-2.98%

Bloomberg US Agg Bond Index

27

0.51%

1.93%

5.68%

4.93%

10.00%

-1.55%

Bloomberg Commodity Index

70

2.73%

1.12%

-3.71%

1.25%

-5.12%

3.20%

Wilshire Liquid Alternative Index

25

0.95%

1.54%

1.99%

5.73%

8.71%

1.89%

US Dollar

10

0.26%

-1.72%

-4.25%

0.03%

-3.19%

3.07%

Bloomberg US Treasury Bill 1-3mo

1

0.11%

0.49%

1.14%

3.85%

5.55%

3.50%

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 September 13, 2024

Rate

This Week

1 Wk Δ%

13-Wk Treasury Yield

4.76%

-0.15%

10-Yr Treasury Yield

3.65%

-0.06%

Bloomberg US Agg Yield

4.25%

-0.08%

Avg Money Mkt Yield

5.07%

-0.01%

Avg 30-Yr Mortgage Rate

6.41%

-0.03%

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%

2.5%

Core CPI YoY

3.2%

3.2%

Producer Price Index (PPI) YoY

--

1.7%

Core PPI YoY

--

3.2%

Sources MarketWatch, First Trust

 

Key Economic Data This Week

Data Point

Expectation

Release Date

US Retail Sales

-0.3%

9/17/24

Housing Starts

1.31M

9/18/24

FOMC Interest Rate Decision

Cut

9/18/24

Existing Home Sales

3.88M

9/19/24

US Leading Economic Indicators

-0.4%

9/19/24

Sources 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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