Recap | Week Ahead | Corporate Earnings

“Failure is the key to success. Each mistake teaches you something.” Jensen Huang, CEO of Nvidia

Last week's market recap:

The S&P 500 closed the week up 1.68%. Year-to-date the index is up 6.91%
NASDAQ closed the week up 1.41%. YTD the index is up 6.67%
U.S. Aggregate Bond index was up .25%. YTD the index is down -1.77%
10-Year Treasury Rate decreased, ending the week at 4.26% down from 4.30% the prior week
- Fed Funds Target rate remains at 5.25-5.50%
The 1-Year Treasury is yielding 5.02%
A 6 Month Treasury is yielding 5.36%
- Short term rates are trending lower. Reinvestment Risk for short term debt remains elevated.

The week ahead:

PCE (the Fed’s preferred inflation gauge)
4Q GDP (2nd estimate)
Consumer Confidence
Pending Home Sales
Earnings: Berkshire Hathaway, Domino’s Pizza, Lowe’s, Macy’s, Best Buy, etc.

Corporate Earnings:

Last week, Nvidia blasted through earnings expectations and lifted sentiment across equity markets. A positive sign for bulls is most of the market’s recent rise is due to higher corporate profits. We’re seeing outsized earnings growth vs multiple expansion. Maintaining profits should be extremely important for justifying the recent rally.

This week, PCE data (The Fed’s preferred inflation metric) will be in focus. The futures market started the year pricing in 6-7 rates cuts in 2024. Right now, 3-3.5 cuts are expected in 2024. Rate cut trajectory certainly still remains important. But, the S&P 500 recalibrated “higher for longer,” via earnings growth. Corporate Earnings have been the main story so far in 2024.

Source: *JP Morgan Guide to the Markets

As always, let us know if you have any questions.

Best,

CRA Investment Committee

Matt Reynolds CPA, CFP®

Tom Reynolds, CPA

Robert T. Martin, CFA, CFP®

Gordon Shearer Jr., CFP®

Jeff Hilliard, CFP®, CRPC®

Joe McCaffrey, CFP®

Phillip Tompkins, CFP®

* https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/

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