Stock Market Update Wednesday September 4, 2024 Stocks consolidated yesterday’s big drop, with the S&P 500 and Nasdaq 100 each finishing just below unchanged. The S&P 500 slipped 0.16%, the Nasdaq retreated 0.3%, and the Russell 2000 was down 0.21%. Nvidia shares declined over 1%, compounding the steep losses from Tuesday. Mega cap technology and semiconductor stocks managed to stabilize, with Advanced Micro Devices and Tesla rallying approximately 3% and 4%, respectively. Other tech names like Oracle, Marvell Technology, and Qualcomm also edged higher. Among sectors, Utilities outperformed, gaining around 0.8%, while Energy lagged, down 1.4%.
Away From Stocks: Treasury's maintained something resembling a panic bid, as two-year yields plunged another 12 basis points to 3.76%, and the long bond dropped to 4.06% from 4.13% on WTI crude continued to slide, dropping to just below $69 per barrel, while gold finished little changed at $2,494 per ounce, bitcoin settled at $58,000, and the VIX climbed above 21.
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Today's macro data featured a softer-than-expected JOLTS report, which showed 7.67 million job openings in July versus 8.1 million expected. The US10Y has fallen below 3.8%, with the 10Y-2Y spread briefly un-inverting. Market breadth remains strong, with five sectors making new all-time high monthly closes, and the equal-weighted ETF RSP has recently pushed back into new all-time high territory. We continue to expect a possible SPY rally back to new highs and do not view Tuesday's sell-off as a significant risk. If bullish price action persists into mid-month, there may be a technical case for weakening in the second half of September into early October. We also continue to see buy alerts on the weekly and daily S&P 500 SPY ETF charts. Additionally, we believe the Fed remains dovish, focusing on keeping labor markets strong.
Bottom Line: Our analysis suggests that September will hold up until mid-month. While September tends to be one of the worst-performing months of the year, election-year seasonality indicates that the month typically holds up until mid-month and often through September expiration before turning lower. The purple line is an important support level that the bulls need to hold.
Tomorrow Important Macro News:
September 5th:
8:30 AM: 2Q F Nonfarm Productivity
Previous: 2.5
Forecast: 2.3
8:30 AM: 2Q F Unit Labor Costs
Previous: 0.8
Forecast: 0.9
9:45 AM: August F S&P Services PMI
Previous: 55.0
Forecast: 55.2
10:00 AM: August ISM Services PMI
Previous: 51.2
Forecast: 51.4
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