US Equity Markets generally pulled back last week after six weeks of gains, as rising interest rates led investors to question the potential impact it could have on corporate earnings. The S&P 500 dropped 1.0% for the week to bring its gains for the year to 21.8%. The Nasdaq actually ticked up 0.2% for the week on strength in technology earnings and is now up 23.4% for the year, while the Russell 2000 (small cap stocks) tumbled 3.0% for the week to bring its gains for the year to 8.9%.
Global Equity Markets declined last week as inflation data out of Japan was hotter than expected and unease around tensions in the Middle East continue. Developed Markets were down 2.0% for the week and are now up 6.2% for the year. Emerging Markets fell 1.8% for the week to bring its gains for the year to 10.9%.
Interest Rates hit their highest levels in three months as economic data remain healthy. The yield on the US 10-Year Treasury closed last week at 4.24%, its highest level since July, vs. the prior week of 4.08%. The yield on 2-Year Treasuries increased to 4.10% from 3.95% the prior week, as the yield curve continues to steepen with the 2/10 spread now at 0.14%. The market is currently placing a 75% probability that the Fed will cut rates by another 0.50% by the end of the year.
Of Interest to Us
More Economic Data suggest corporate investment may be in a holding pattern. Durable Goods Orders, which measure new orders placed with manufacturers and can be quite volatile, declined by 0.8% in September, marking the third month of the past four months with declines. With the election too close to call, it is possible that companies are awaiting the outcome before committing to investments.
Market Data
for the week ending 10/25/2024
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