The S&P 500 (Index: SPX) slipped a little over 0.8% in the trading week ending Friday, 26 July 2024. The index closed out the week at 5,459.10. The index is 3.7% below its peak of 5,667.20 that it reached on 16 July 2024.
The market's decline coincided with the of the conveyance effect gaining steam, the mechanics of which are seen as a rotation from the megacap tech stocks that came to dominate the S&P 500 in the first half of 2024 into other component stocks of the index.
On net, we're seeing that negative changes in the market capitalization of megacap tech stocks that are being mostly offset by increases in stocks with lower market caps. In the past week, that worked out to a relatively small decline in the level of the index.
A level that remains consistent with the dividend futures-based model's projected trajectory for what the S&P 500's value would be as current day investors focus on the distant future quarter of 2025-Q2. The latest update of the alternative futures chart shows that state of affairs.
The market-moving news headlines for the week that was emphasize the ongoing rotation in the market prompted by the conveyance effect.
- Monday, 22 July 2024
-
- Signs and portents for the U.S. economy:
- Tech outage eases after widespread disruption
- Oil prices dip after Biden exit, rate outlook remains in focus
- Fed minions thinking about when to start cutting U.S. interest rates:
- Much bigger stimulus developing in China:
- Nasdaq jumped, S&P and Dow also ended higher as Biden drops out of presidential race
- Tuesday, 23 July 2024
-
- Signs and portents for the U.S. economy:
- Crude oil posts fourth straight drop with growing concerns about demand in China
- Record house prices depress US home sales in June
- Summer travel boom not enough to fire up airline earnings
- Economists say Fed minions to deliver two rate cuts before end of 2024:
- Much bigger stimulus developing in China:
- JapanGov minions thinking about how to get more inflation:
- Nasdaq, S&P finish in the red as markets prepare for Big Tech quarterly results
- Wednesday, 24 July 2024
-
- Signs and portents for the U.S. economy:
- Oil prices finish higher as US oil, fuel inventories ease
- US new home sales fall to seven-month low in June
- Bigger trouble developing in China:
- BOJ minions signal they'll hike rates and reduce QE:
- Bigger trouble developing in Eurozone:
- Nasdaq sinks more than 3%, S&P slides on disappointing start of Mag 7 financial results
- Thursday, 25 July 2024
-
- Signs and portents for the U.S. economy:
- US economic growth regains steam in second quarter; inflation slows
- US 30-year fixed-rate mortgage edges up to 6.78%, Freddie Mac says
- Oil edges up on strong US GDP data but Asia economic woes limit gains
- Fed minions expected to start delivering rate cuts in September 2024:
- Much bigger stimulus, trouble developing in China:
- China central bank unexpectedly conducts medium-term loan operation, cuts interest rate
- Chinese banks cut deposit rates to relieve squeezed margins
- Bigger trouble developing in Eurozone:
- Nasdaq, S&P close lower in late-session selloff as aim for tech comeback loses steam
- Friday, 26 July 2024
-
- Signs and portents for the U.S. economy:
- Expectations build for Fed minions to cut rates in September 2024:
- Cooling US inflation bolsters September rate cut hopes
- Fed seen on track for September rate cut after good inflation data
- Bigger stimulus developing in China:
- Bigger trouble developing in Eurozone:
- Dow, S&P, surge as tech stocks advance, PCE data stoke rate-cut expectations
The CME Group's FedWatch Tool forecast is mostly unchanged again this week. The tool still anticipates the Fed will hold the Federal Funds Rate steady in a target range of 5.25-5.50% until 18 September (2024-Q3), at which time, the Fed is expected to start a series of 0.25% rate cuts that will occur at 6-to-12-week intervals at least into mid-2025.
The BEA's first official estimate of GDP in 2024-Q2 is +2.8%, which aligns with the Atlanta Fed's GDPNow tool's final forecast of +2.7% for this quarter. The GDPNow tool has shifted to project 2024-Q3's real GDP growth rate, which is starting with an estimate of +2.8% growth.
Image credit: Microsoft Copilot Designer.. Prompt: "A Wall Street bear spinning a Wheel of Fortune".
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Closing values for previous trading day.
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