Time for a pop quiz. What was the biggest market-moving headline from the past week?
BZZZ, time's up! It's a trick question because no news story moved the needle for the stock market during the past week. The S&P 500 (Index: SPX) closed out the week of trading at 5,460.48, down 0.08% from where it closed the previous Friday.
The lack of market moving news and change in the level of the index coincides with the early arrival of the summer doldrums for the U.S. stock market. This is the period after most companies have reported their earnings for the previous quarter, where we must now wait until the next quarter to find out what changes in outlook might alter the index' trajectory by changing investor expectations.
The relative lack of action in the week's trading can be seen in the latest update for the alternative futures chart, in which we find the level of stock prices falls to the low side of the trajectory associated with investors focusing on 2024-Q3.
2024-Q3 continues to hold the forward-looking focus of investors because of the anticipated timing of the Federal Reserve's first rate cut in years. The CME Group's FedWatch Tool anticipates the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% until 18 September (2024-Q3), the same as it forecast in the previous week. The tool anticipates the Fed will start a series of 0.25% rate cuts on that date, which will occur at 12 week intervals well into 2025.
Meanwhile, we weren't kidding when we said it was a slow news week. Here's what passed as market-moving news in the week that was.
- Monday, 24 June 2024
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- Signs and portents for the U.S. economy:
- Fed minions thinking about how to keep greasing U.S. housing market, would really like to see less inflation:
- Fed's Mester: Mortgage bond sales should remain option for Fed
- Fed's Goolsbee still looking for data inflation is cooling - CNBC
- Fed's Daly: inflation not the only risk, policy must 'exhibit care'
- BOJ minions setting expectations for rate hike in July 2024:
- Dow, S&P, and Nasdaq ended mixed as tech stocks suffered
- Tuesday, 25 June 2024
-
- Signs and portents for the U.S. economy:
- Oil prices steady as inflation worries limit summer demand optimism
- Big US banks expected to be cautious on shareholder payouts
- Fed minions say they want to hold interest rates steady "for some time", claim will be time for rate cuts "at some point":
- Fed's Bowman: need steady policy rate 'for some time' to beat inflation
- Fed's Cook: 'At some point' it will be time to cut interest rates
- Bigger trouble developing in China:
- BOJ minions get inflation data to support rate hike, still worried about risk of crashing yen:
- Japan's business-to-business service inflation hits 2.5% in May
- Japan to respond appropriately to excessive yen volatility, official says
- Nasdaq, S&P snap three-day losing streak as Nvidia rebounds; Dow ends lower
- Wednesday, 26 June 2024
-
- Signs and portents for the U.S. economy:
- U.S. crude imports touch two-year high despite lukewarm demand
- US new home sales slump; supply at more than 16-year high
- US banks suffer steeper losses, but retain large cushions in annual Fed health check
- Fed minions really wanting to believe holding interest rates steady will cause inflation rate to fall:
- Bigger trouble developing in Japan:
- Sharp Japan GDP downgrade possible, affecting monetary policy, analysts say
- Yen slumps to lowest since 1986, putting traders on red alert
- Wall Street ends slightly up, trade choppy ahead of inflation data
- Thursday, 27 June 2024
-
- Signs and portents for the U.S. economy:
- Oil settles $1 up, war risk premium outweighs ample US stocks
- US weekly jobless claims, equipment spending data point to slowing economy
- Car affordability affecting auto lending market, study shows
- Fed minions say no rate cuts until inflation slows, see rate cut in 2024-Q4:
- Fed's Bowman: not ready to cut rates until clearer inflation is ebbing
- Fed's Bostic says inflation moving in 'right direction,' sees one Q4 rate cut
- ECB minions told they should keep cutting Eurozone interest rates:
- Wall Street closes subdued as investors sit, wait for inflation data
- Friday, 28 June 2024
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- Signs and portents for the U.S. economy:
- Oil prices to stay steady as China demand woes offset Mideast risks
- US inflation cools in May; consumer spending rises moderately
- Fed minions get inflation data they want, say they’ll sit on their hands for the time being:
- Fed gets heartening inflation data, but slow road ahead
- Fed's Barkin says he'll 'proceed deliberately' on policy
- New York Fed says reverse repo inflows hit highest level since start of year
- BOJ minions get more inflation data to support rate hike:
- ECB minions claim to have analytical superpowers:
- Wall Street ends lower as investors digest inflation data, presidential debate
The Atlanta Fed's GDPNow tool's forecast of annualized real GDP growth rate during 2024-Q2 dropped to +2.2%, falling from the +3.1% growth projected a week earlier.
When it comes to market moving news, this upcoming week may be even slower than the trading week ending on Friday, 28 June 2024 given the timing of the Fourth of July market holiday in the United States. We'll all find out if that hypothesis holds soon enough....
Image credit: Microsoft Copilot Designer. Prompt: "A Wall Street bull and bear looking out at a calm sea with no wind or waves from a ship".
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Closing values for previous trading day.
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