Weekly Market Bullets

for the week ending 9/20/2024

• US Equity Markets rallied to new highs last week driven by the Fed's decision to cut rates by 0.50%. The S&P 500 rose 1.4% for the week to bring its gains for the year to 19.6%. The Nasdaq increased 1.5% for the week and is now also up 19.6% for the year, while the Russell 2000 (small cap stocks) was up 2.1% for the week to bring its gains for the year to 9.9%.

• Global Equity Markets had more muted returns last week, as key central banks in Europe and Asia kept rates unchanged. Developed Markets were up 0.5% for the week and are now up 8.5% for the year. Emerging Markets increased 2.2% for the week to bring its gains for the year to 8.1%.

• US Interest Rates actually increased last week despite the Fed rate cut, which had been largely anticipated. The yield on the US 10-Year Treasury closed at 3.73% vs. 3.65% the prior week. The yield on the US 2-Year Treasury was largely flat, closing at 3.59% vs. 3.58% the prior week. The yield curve continues to normalize, now positive by 0.14%. Investors currently expect the Fed to cut rates another 0.50% at its meeting in November and by another 0.25% at its meeting in December.

• History shows that Consumer Staples, Healthcare, and Utilities are the best performing equity sectors after the first Fed rate cut. Since 1995, the highest average sector returns three months after the first rate cut are Utilities (up 9.0%), Consumer Staples (up 6.0%), and Healthcare (up 5.7%). By contrast, the sectors with the worst average returns three months after the first rate cut are Technology (down 5.6%), Real Estate (down 3.9%), and Consumer Discretionary (down 2.8%).

Market Data

for the week ending 9/20/2024