WEEKLY MARKET RECAP – AUGUST 2, 2024
Weak labor market data and mixed earnings reports weighed on stocks, leading to a third consecutive weekly decline for the S&P 500 and NASDAQ, while the Dow snapped its four-week winning streak. The sell-off intensified on Friday, leaving the S&P 500 5.7% below its July 16 record high, and the NASDAQ entering correction territory, down 10.0% from its July 10 peak.
Stocks plunged on Friday after U.S. job growth slowed for the third straight month, with the unemployment rate rising to its highest level in nearly three years. July saw a gain of just 114,000 jobs, falling short of expectations and well below the 12-month average of 215,000. The unemployment rate increased to 4.3% from 4.1% in the previous month.
The U.S. Federal Reserve once again refrained from cutting interest rates, but stocks rallied after Chair Jerome Powell hinted that an initial rate reduction could be considered at the next meeting in mid-September if inflation continues to ease. The Fed’s updated policy statement also indicated a shift in focus, acknowledging concerns about labor market weakness alongside inflation risks.
The evolving interest rate outlook and new economic data sparked a rally in government bonds, driving the yield on the 10-year U.S. Treasury bond down to around 3.80% on Friday, its lowest level in eight months. Yields on 2- and 30-year notes also fell sharply, reaching levels not seen since late last year.
Earnings season continued with mixed results from major technology companies. By Friday, FactSet reported that analysts expected the overall second-quarter earnings of S&P 500 companies to grow by 11.5% compared to the same quarter last year, based on both reported results and projections for companies that have yet to be reported. This marked an increase from the 8.9% growth rate projected at the start of earnings season.
Despite the negative momentum in mid-July, the S&P 500 ended the month with a 1.1% gain, marking its eighth positive month out of the last nine. The Dow outperformed with a 4.4% increase, while the NASDAQ lagged, declining 0.8%.
Gold futures surged to new record highs, briefly surpassing $2,500 per ounce on Friday for the first time. By Friday afternoon, the price was up 4% for the week and had risen about 20% year-to-date.
While the U.S. Federal Reserve kept its key interest rate steady on Wednesday, two other central banks made policy shifts: the Bank of England cut its key rate for the first time in four years, and the Bank of Japan raised its benchmark rate, citing concerns over the yen’s weakness.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| S&P Case-Shiller home price index (20 cities) | May | 6.8% | 7.3% |
| Consumer confidence | July | 100.3 | 97.8 |
| Job openings | June | 8.18 million | 8.23 million |
| ADP employment | July | 122,000 | 155,000 |
| Employment cost index | Q2 | 0.9% | 1.2% |
| Chicago Business Barometer (PMI) | July | 45.3 | 47.4 |
| Pending home sales | June | 4.8% | -2.1% |
| Initial jobless claims | July 27 | 249,000 | 235,000 |
| U.S. productivity | Q2 | 2.3% | 0.4% |
| S&P U.S. manufacturing PMI | July | 49.6 | 51.6 |
| ISM manufacturing | July | 46.8% | 48.5% |
| Construction spending | June | -0.3% | -0.4% |
| U.S. auto sales | June | 15.8 million | 15.2 million |
| U.S. employment report | July | 114,000 | 179,000 |
| U.S. unemployment rate | July | 4.3% | 4.1% |
| U.S. hourly wages | July | 0.2% | 0.3% |
| Hourly wages year over year | 3.6% | 3.8% | |
| Factory orders | June | -3.3% | -0.5% |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 39,737.26 |
| Nasdaq Composite | 16,776.16 |
| S&P 500 Index | 5,346.56 |
| CBOE Volatility Index | 23.39 |
| S&P GSCI | 533.06 |
| U.S. Dollar Index | 103.208 |
| 10-Year T-Note (Sep ’24) | 114-045 |
| Crude Oil WTI (Sep ’24) | 73.52 |
| Natural Gas (Sep ’24) | 1.967 |
| Gold (Dec ’24) | 2,469.8 |
| Silver (Sep ’24) | 28.392 |
| Corn (Dec ’24) | 403-2 |
| Wheat (Sep ’24) | 539-0 |
| Soybean (Nov ’24) | 1027-2 |
| Coffee (Sep ’24) | 230.50 |
| Sugar #11 (Oct ’24) | 18.10 |
| Cocoa (Dec ’24) | 6,542 |
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