As we all know by this point, the Fed cut rates by 50 basis points last week, which wasn’t received well on the day of the rate cut. However, the next day, markets were off to the races, with the major indices surging upward. This sent the Dow up 0.86%, the S&P up 1.29%, the Russell up 1.8%, and the Nasdaq up 2.10% on a week-over-week basis. This larger-than-anticipated cut combined with Fed commentary has the market believing that we’re likely to see another 50 basis points in cuts by the end of the year, which would be huge for markets!
As we mentioned in the previous section, we saw a huge cut to the Federal Funds Rate last week, which triggered a rally in the markets. We also saw some key housing metrics as well as the initial jobless claims numbers come in a bit better than anticipated, which helped fuel the rally. Although we had a great week last week, we’ve still got a relatively busy week ahead of us!
Although this week certainly won’t be as impactful as last week, there are still some important economic data points coming out, in addition to a slew of speeches from Fed officials. On Tuesday, we kick things off with consumer confidence, followed by new home sales on Wednesday. On Thursday, we get to see pending home sales data, and on Friday, we get our hands on the PCE data for the month of August, as well as the final consumer sentiment reading for the month of September.
Although this week is slow in terms of earnings releases, we still have some large companies reporting their earnings, such as:
09/24 – AutoZone (AZ), KB Home (KBH)
09/25 – Micron Technology (MU), Cintas (CTAS), Jefferies (JEF)
09/26 – Costco Wholesale (COST), Accenture (ACN), Jabil (JBL), CarMax (KMX), Vail Resorts (MTN)
This week, everyone will be paying attention to COST. This wholesale giant has had its valuation pushed sky high, so analysts and retail investors alike will be curious to see if they can continue their tradition of smashing expectations, sending the stock price surging.
It’ll also be important to pay attention to what KBH has to say, as they are one of the largest homebuilders in the US. They’ll give us some important insight into the real estate market, as well as an inkling as to whether or not the recent rate cut caused any noteworthy activity for them.
Monitoring the market conditions this week.
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