July 16, 2024

Market Commentary

Weekly Market Commentary July 17, 2024

By: Greg Lai and Alex Hsaio, Co-Chief Investment Officers

As the political spotlight intensified on whether Biden should be the Democratic presidential candidate, market participants focused on more tangible concerns—economic fundamentals and inflation. June’s CPI report was a welcome reprieve, showing a decline to 3% from May’s 3.3%. Investors responded enthusiastically, propelling the S&P 500 index up by +0.89% and the bond market by +0.82%. However, the inflation outlook remains anything but straightforward. Core PPI, which reflects changes in seller prices for goods and services, actually rose by 2.6% year-over-year, up from May’s 2.4%.

Growth stocks, often the market’s darlings, were sidelined as earnings season opened with a robust performance from bank stocks. Major players like JPMorgan Chase, Wells Fargo, and Citigroup all delivered positive earnings surprises, sending financial stocks up by +2.28%, outpacing the Tech sector’s modest +0.76% gain. While it’s premature to declare a full-fledged market rotation, the broadening into value stocks suggests a healthy economy and hopes of waning inflation pressures. This shift was underscored by the S&P 500 Equal-Weighted Index’s impressive +2.93% gain, outperforming the headline index by +2.04%, though still lagging year-to-date.

With interest rates holding steady and elevated, investors will be keen to confirm the economy’s resilience and the ongoing AI momentum as earnings season progresses. Meanwhile, the political theatre in Washington is set to dominate headlines as Democrats wrestle with Biden’s candidacy, and Republicans rally behind Trump. The anticipation will crescendo towards the upcoming FOMC meeting on July 31, where hopes for an interest rate cut are reflected in the recent dip in bond yields.

Advisory Services offered through Sowell Management, a registered investment adviser. Assets custody and online access through Fidelity Investments. This material is for information purposes, educational purposes, and/or illustrative use only. The material presented does not constitute investment advice and is not intended as an endorsement of any specific investment. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. Investing involves risk including the potential loss of principal, and unless otherwise stated, are not guaranteed. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

The views are subject to change and are not intended as a forecast or guarantee of future results. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Trek Wealth Solutions believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Trek Wealth Solutions’ view as of the time of these statements. 

This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Past performance does not guarantee future results.

Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices does not account for any fees, commissions or other expenses that would be incurred.  Returns do not include reinvested dividends.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value.

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 actively traded “blue chip” stocks, primarily industrials, but includes financials and other service-oriented companies. The components, which change from time to time, represent between 15% and 20% of the market value of NYSE stocks.

The Nasdaq Composite Index is a market-capitalization weighted index of the more than 3,000 common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks. The index includes all Nasdaq listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debentures.

Advisory services offered through Sowell Management, a Registered Investment Advisor.