The S&P 500 (Index: SPX) reached the end of Summer 2024 on the verge of reaching a new record high. The index closed out the final week of August 2024 at 5,648.40, just 18.8 points (0.3%) below its all-time record high close it set on 16 July 2024.
Part of what makes that remarkable is the share of the index' market capitalization claimed by its top 10 component stocks shrank during the last two months. Our summer snapshot found these stocks represented nearly 35.8% of the entire value of the index. Two months later, their share of the index' total valuation has fallen to just over 34.0%.
That's the conveyance effect in action, in which investors taken their gains from top-flying stocks like Nvidia (NASDAQ: NVDA) and are rotating into other stocks within the index, boosting their relative valuations.
With respect to the dividend futures-based model's alternative futures chart, that was enough to keep the trajectory of the index close to the top end of the latest redzone forecast range on the chart, as expected. Here's the latest update of the chart:
Overall, it was a slow news week following the previous week's major events, which was also to be expected ahead of the long U.S. Labor Day holiday weekend. Here are the market-moving headlines from the week that was:
- Monday, 26 August 2024
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- Signs and portents for the U.S. economy:
- Surging grocery prices in focus as US tries to stop Kroger deal
- Fed minions changing monetary policy too slow, maybe not enough:
- Fed's shift to job market risks is done; now policy has to catch up
- Fed most likely to cut rates by quarter percentage point next month, Daly says
- Bigger trouble developing in China:
- BOJ minions dealing with self-inflicted credibility problem:
- Wall Street ends mixed with S&P and Nasdaq lower, while the Dow hits all-time high
- Tuesday, 27 August 2024
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- Signs and portents for the U.S. economy:
- Oil prices fall 2% on economic worries, technical decline
- US house prices fall on monthly basis in June
- BOJ minions wonder if they should include wage trends in their economic analysis:
- ECB minions say more rate cuts ahead, claim they're not sure yet about September:
- Nasdaq, S&P eke out slight gains, Dow notches new record close ahead of Nvidia test
- Wednesday, 28 August 2024
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- Signs and portents for the U.S. economy:
- US 30-year mortgage rate falls to lowest since April 2023
- Oil retreats as demand concerns offset Libya supply risks
- Fed minions send confused message:
- Bigger stimulus developing in China:
- BOJ minions claim they'll raise interest rates if Japan's economy can afford them:
- Nasdaq falls more than 1% as tech stocks tumble before big test in Nvidia earnings
- Thursday, 29 August 2024
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- Signs and portents for the U.S. economy:
- US second-quarter economic growth revised higher on consumer spending
- US pending home sales tumble to record low in July
- Oil settles up over 1% on worries over supplies from Libya, Iraq
- Bigger trouble, bailouts developing in China:
- China's factory activity seen extending declines in Aug
- China's central bank buys government bonds, stirs intervention talk
- BOJ minions surprised to have better economic news:
- ECB minion claims to worry about cutting Eurozone interest rates too quickly:
- Dow notches new record close; Nasdaq falls as Nvidia loses nearly $200B in market cap
- Friday, 30 August 2024
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- Signs and portents for the U.S. economy:
- Oil prices face pressure from slow China demand and inventory rise - Reuters poll
- Solid US consumer spending pushes against hopes for hefty Fed rate cut
- U.S. home prices forecast to rise modestly as Fed cuts rates - Reuters poll
- Fed's preferred inflation gauge rises 2.6% Y/Y in July, slightly less than expected
- Fed minions expected to deliver September 2024 rate cut:
- Bank of China minions thinking about how to fix Chinese economy:
- China's interest rate reform will be 'arduous, long' process
- China is fixing housing market with a long gaze
- BOJ minions get data to support more rate hikes, but probably won't:
- ECB minions get data to support their next rate cut, thinking about even more:
- Lowest euro zone inflation in 3 years sets up ECB for cut
- ECB's Schnabel keeps door open to further rate cuts
- S&P 500 inches up after upbeat economic data
The CME Group's FedWatch Tool forecast was unchanged. It continues to anticipate the Fed will hold the Federal Funds Rate steady in its current target range of 5.25-5.50% until 18 September (2024-Q3). On that date, the Fed is expected to start a series of 0.25%-0.50% rate cuts that will occur at six-week intervals well into 2025.
The Atlanta Fed's GDPNow tool's projection of the real GDP growth rate for the current quarter of 2024-Q3 rebounded to +2.5% from the previous week's projection of +2.0% growth.
Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull getting excited as the S&P 500 gets close to setting a new record high".
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