Stock Market Update Monday October 28, 2024 Stocks surged today as market participants positioned themselves ahead of critical earnings announcements from several major tech companies. The S&P 500 index advanced 0.27%, the Nasdaq Composite rose 0.26%, and small-cap heavy Russell 2000 outperformed, rallying 1.76%. Meanwhile, crude oil prices plummeted nearly 6% in response to restrained Israeli airstrikes involving Iran. This significant dip in oil triggered a sell-off in energy stocks, making the energy sector the only one to close in negative territory. Conversely, financials led the day’s gains, outperforming other sectors. This week, investors are gearing up for a slew of major events, including earnings releases from five of the "Magnificent Seven" tech giants, a pivotal stage in the U.S. presidential race, and critical economic indicators, with Friday’s October Jobs Report in focus.
Away From Stocks: Long-dated U.S. Treasury's continued to face selling pressure, with yields on the 10-year and 30-year notes increasing by three and two basis points to 4.28% and 4.53%, respectively. WTI crude took a significant hit, tumbling over 5% to settle around $68 per barrel. Gold inched down, trading at $2,742 per ounce, while Bitcoin extended its gains, surpassing the $69,000 mark. The VIX, often seen as the market’s "fear gauge," hovered just below the 20 level, indicating a tempered risk environment.
Election Date: Tuesday, November 5, 2024 Key state polls align with national surveys, reflecting a highly competitive race for the White House with most outcomes within statistical margins of error. Both campaigns are allocating resources strategically to the five swing states that shifted from President Trump in 2016 to Biden in 2020: Wisconsin (WI), Arizona (AZ), Nevada (NV), and Michigan (MI) Pennsylvania (PA). Polls indicate tight races in each jurisdiction. Additionally, there are indications that some Democrats believe they have an opportunity to capture North Carolina (NC), which was carried by former President Trump in 2020 by his narrowest margin of victory.
Corporate earnings have demonstrated robust performance this season, with major technology firms poised to release their financial results this week. As previously noted, the key metric is the acceleration of real revenue growth (adjusted for inflation) to 2%, indicating an enhancement in the quality of earnings expansion. Earnings This Week: Technology giants like Alphabet ($GOOGL) 🔍, Microsoft ($MSFT) 💻, Amazon ($AMZN) 🛒, and Apple ($AAPL) 🍎 are poised to significantly influence market sentiment, given their substantial weight in major indices. Energy sector results from Chevron ($CVX) 🛢️ and Exxon Mobil ($XOM) 🛢️ will shed light on global demand and pricing pressures within the oil markets. Pharmaceutical companies such as Pfizer ($PFE) 💊, AbbVie ($ABBV) 💊, and Merck ($MRK) 💊 are expected to provide updates that could affect healthcare sector valuations. Financial services firms like Visa ($V) 💳 and Mastercard ($MA) 💳 will offer perspectives on consumer spending patterns and economic activity. Investors should monitor these releases for guidance on future earnings potential, sector-specific challenges, and macroeconomic indicators that could impact portfolio strategies.
Macro News:
Tuesday, October 29
October Consumer Confidence Index 📊: The Conference Board's Consumer Confidence Index is set to be released, providing valuable insights into consumer sentiment amid current economic conditions. A strong reading could indicate increased consumer spending power, which is a positive driver for economic growth.
S&P Case-Shiller Home Price Index 🏠: This index will offer an update on national home price trends, reflecting changes in residential real estate values across 20 major metropolitan regions. Analysts will closely examine the data for signs of cooling or acceleration in the housing market, which has significant implications for both consumer wealth and inflation dynamics.
September Job Openings and Labor Turnover Survey (JOLTS) 🏢: The JOLTS report will reveal the number of job openings, hires, and separations for September. A high number of job openings relative to unemployment figures could suggest a tightening labor market, potentially leading to upward pressure on wages and influencing Federal Reserve policy decisions.
Bottom Line:
Our previous pivot date was October 8th, and the SPY rallied for seven trading days to a record high on October 17th. This pattern of sideways, choppy price action is characteristic of October in an election year. We have a cycle pivot date on October 29th; traders should anticipate increased volatility leading up to this date as market participants position themselves ahead of the upcoming 2024 election. The SPY ETF, QQQ ETF, IWM ETF, and DIA have all activated bullish buy signals, with no signs of a market top or imminent reversal. Our year-end outlook remains optimistic, supported by our proprietary algorithm and favorable liquidity conditions. Cash on the sidelines continues to accumulate, creating potential for a strong inflow into equities. Jerome Powell & Co. maintain a dovish stance, reflecting a 'no landing' economic scenario, while China's PBOC has introduced significant monetary easing, adding further global stimulus. Market participants are closely monitoring the upcoming U.S. election results, but we anticipate a favorable market reaction regardless of the outcome, as either candidate is expected to support short-term growth. October's volatility aligns with historical seasonal patterns, yet we believe markets will resume an upward trajectory following the election, paving the way for a strong December rally. The VIX is projected to settle in the 10-11 range, indicating a reduction in implied volatility as we approach the holiday season, which typically supports a risk-on sentiment in equity markets.
