The S&P 500 Clocks Another New Record High

It was a big week for Wall Street’s bulls.

The S&P 500 (Index: SPX) achieved a new high to close out the third week of October. By the time the market closed on Friday, 18 October 2024, the index sat at a level of 5,864.67, nearly a full two percent higher than it closed the previous week, which was also a record high close for the S&P 500.

Most of that gain came on Monday, 14 October 2024 while the bond market was closed for the Columbus Day holiday. After retreating a bit during the week, stock prices rose again on Friday, 18 October 2024 to achieve the index’ new record high close.

That was enough for the S&P 500′s trajectory to keep tracking along in the upper portion of the redzone forecast range. The latest update of the alternative futures chart shows the index continues to largely behave as expected.

The market moving news of the week that was mainly revolved around two topics: central bank rate cuts and China’s as yet insufficient effort to stimulate its economy.

Monday, 14 October 2024

• Signs and portents for the U.S. economy:

• Oil down 2% as China demand woes erase last week’s gains

• OPEC cuts 2024, 2025 global oil demand growth view again

Fed minions keep pushing expectation for smaller rate cuts ahead:

• Minneapolis Fed’s Kashkari sees further ‘modest’ rate cuts as appropriate
• Fed’s Waller calls for ‘more caution’ on rate cuts

Bigger trouble developing as stimulus falls short in China:

• China flags more fiscal stimulus for economy, leaves out key details on size

• China’s stimulus message leaves investors wanting
• “The Policy Sounds Quite Weak”: China’s MOF Stimulus Announcement Disappoints
• China’s stimulus promises bring property sector hope, rather than confidence
• China copper, iron ore stay stimulus believers, but others sceptical

China’s deflationary pressures build in Sept, consumer inflation cools

China’s exports miss forecasts as lone bright spot fades

S&P 500 ends at fresh record high, as Dow scales 43k for first time

• Nasdaq, S&P, Dow closed in the green with more earnings and additional Fedspeak

Tuesday, 15 October 2024

• Signs and portents for the U.S. economy:

• US consumers see higher long-run inflation, rising delinquency risk
• Oil plunges 4% as Iran supply disruption concerns ease, demand outlook weakens

Fed minions keep saying they’ll continue cutting U.S. interest rates:

• Fed’s Daly says central bank likely on track for more rate cuts

Bigger trouble, stimulus developing in China:

• China’s economy set to grow 4.8% in 2024, missing target: Reuters poll
• China may raise $850 billion in new debt over three years to spur growth, says report

• China QE Next? Caixin Reports Massive Bond Issuance Imminent

World’s central bankers pretty excited to buy gold, BOJ minions say they’re thinking about “very moderate” rate hikes:

• Central banks remain keen buyers of gold, representatives tell bullion conference
• Bank of Japan policymaker calls for ‘very moderate’ pace of rate hikes

Signs of economic growth developing in Eurozone:

• Euro zone economy shows some signs of growth

Nasdaq slips 1%, S&P halts two-day win streak as ASML, Nvidia weigh on chip stocks

• Wall Street indexes lose ground as chip, oil stocks drop
• ASML’s lowered outlook suggests factory overcapacity, not chip doom

Wednesday, 16 October 2024

• Signs and portents for the U.S. economy:

• Oil prices hold at 2-week low on lower oil demand growth forecasts

Fed minions signal they’re still wanting to keep cutting U.S. short term interest rates, worry about rising rents:

• Fed’s Bostic says his ‘dot’ was for 25 bp more in cuts in 2024
• Cleveland Fed warns sticky rent gains may pressure overall inflation

Most world central banks getting excited to cut their interest rates:

• Big central banks are firmly in rate-cut mode

BOJ minions can count on JapanGov minions to spend, borrow more:

• Japan premier Ishiba vows big spending, drifts away from fiscal restraint

ECB minions blamed for being to slow to address Eurozone inflation after pandemic:

• ECB could have curbed inflation with earlier rate hikes, DIW says
• ECB set for second straight rate cut as euro zone economy ails

Dow notches record close, S&P rises as small-cap rally, rotation helps Wall Street rebound

Thursday, 17 October 2024

• Signs and portents for the U.S. economy:

• https://www.reuters.com/business/energy/oil-inches-up-after-surprise-drop-us-crude-stockpiles-2024-10-17/

Fed minions signal they’re going to keep shrinking their balance sheet:

• New NY Fed tool suggests balance sheet drawdown has more room to run

Bigger stimulus, trouble developing in China:

• China cenbank chief flags more interest rate cuts
• China’s new home prices fall at fastest pace since 2015

Bigger trouble developing in Japan points to bigger troubles in China, U.S.:

• Japan’s exports fall for first time in 10 months on China, US slowdown

• Japan exports drop 1.7% year/year in September

ECB minions cut rates with bigger trouble developing in Eurozone:

• ECB cuts rates again as euro zone economy stagnates

• ECB cuts rates as expected, says well on track to tame inflation
• ECB lowers rates and eyes more cuts as economy sags

Dow notches 39th record close of 2024, while Nasdaq ekes out gains; S&P slips marginally

Friday, 18 October 2024

• Signs and portents for the U.S. economy:

• Oil prices fall, weekly 7% drop on China demand woes, mixed Mideast outlook
• US single-family homebuilding hits five-month high, but trend remains soft

Fed minions say they’re not rushing to deliver more rate cuts:

• Fed’s Bostic sees no need to rush on rate cuts

Bigger trouble, stimulus developing in China:

• China’s Q3 GDP hits weakest pace since early 2023, backs calls for more stimulus

• China’s Q3 GDP grows 4.6% y/y, slightly above economists’ estimate

China urges swift implementation of expansive financial policies

China rolls out $112 bln funding schemes to bolster stock market

BOJ minions see lots of trouble ahead:

• Bank of Japan chief warns of unstable markets, global uncertainties
• Japan’s Inflation Slows for First Time Since Aprill Ahead of BOJ

ECB minions being given message to pick up pace of Eurozone interest rate cuts:

• Case for quick ECB rate cuts mounts as growth weakens and inflation is tamed

S&P, Dow both notch new record closes as Wall Street posts six-week win streak

• Dow and S&P end at fresh record highs, lifted by Netflix earnings and tech stocks
• Gold closes above $2,700 for first time as geopolitical tensions simmer

The CME Group’s FedWatch Tool anticipates a 0.25% rate cut on 7 November 2024 with additional 0.25% cuts at 6-to-12-week intervals through 17 September 2025. The CME FedWatch tool sees the Federal Funds Rate bottoming at a target range of 3.25-3.50% at that time.

The Atlanta Fed’s GDPNow tool‘s projection of the real GDP growth rate for the current quarter of 2024-Q3 ticked up to +3.4% from the previous week’s forecast of +3.3% growth.

Image credit: Microsoft Copilot Designer. Prompt: “An editorial cartoon of a Wall Street bull on the trading floor of the New York stock exchange celebrating a record high for the S&P 500″.