WEEKLY MARKET RECAP – JULY 19, 2024
The NASDAQ dropped nearly 4%, ending a six-week winning streak as several mega-cap technology stocks slid for the second consecutive week. The S&P 500 experienced a smaller decline of around 2%, while the Dow was an outlier with a nearly 1% gain.
For the second week in a row, a U.S. small-cap stock benchmark significantly outperformed, posting a 1.7% total return compared to a 1.8% decline for its large-cap counterpart. The Russell 2000 Index’s surge of 7.7% over two weeks indicated a rotation towards market segments seen as potential beneficiaries of expected interest-rate cuts.
U.S. large-cap value stocks outperformed their growth counterparts for the second consecutive week, reducing the growth style’s year-to-date performance lead and signaling a shift in market sentiment. Over the past two weeks, a value benchmark has risen by 3.5%, while the growth benchmark has declined by 4.3%.
The second week of quarterly earnings season saw an increase in expectations. Based on initial results and forecasts, analysts on Friday projected that S&P 500 companies would post an average second-quarter earnings increase of 9.7% compared to the same quarter a year earlier, according to FactSet. This is up from the 9.1% projected just a week earlier.
In a week of volatile trading, an index tracking investors’ expectations for short-term U.S. stock market volatility rose to its highest level in nearly three months. The Cboe Volatility Index (VIX) climbed 32% for the week, reaching its highest level since April 22, when it was near its year-to-date high.
U.S. retail sales were unchanged in June relative to the previous month, surpassing economists’ consensus forecast of a 0.4% decline. However, another indicator showed a worse-than-expected result, as the latest weekly count of initial unemployment claims rose to 243,000, matching the highest level since August 2023.
The European Central Bank (ECB) kept its key interest rate unchanged, maintaining its stance after implementing an initial rate cut last month. The ECB’s rate cut in June widened the policy gap with the U.S. Federal Reserve, which has yet to cut its key lending rate from its current high level.
Thursday’s scheduled release of the U.S. government’s initial estimate of second-quarter GDP is expected to show an acceleration compared to the first quarter when GDP grew at a 1.4% annual rate. An estimate released on Wednesday by U.S. Federal Reserve economists projected a second-quarter growth rate of 2.7%.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| Empire State manufacturing survey | July | -6.6 | -6.0 |
| U.S. retail sales | June | 0.0% | 0.3% |
| Retail sales minus autos | June | 0.4% | 0.1% |
| Import price index | June | 0.0% | -0.2% |
| Import price index minus fuel | June | 0.2% | -0.3% |
| Business inventories | May | 0.5% | 0.3% |
| Home builder confidence index | July | 42 | 43 |
| Housing starts | June | 1.35 million | 1.31 million |
| Building permits | June | 1.45 million | 1.4 million |
| Industrial production | June | 0.6% | 0.9% |
| Capacity utilization | June | 78.8% | 78.3% |
| Initial jobless claims | July 13 | 243,000 | 223,000 |
| Philadelphia Fed manufacturing survey | July | 13.9 | 1.3 |
| U.S. leading economic indicators | June | -0.2% | -0.4% |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 40,287.53 |
| Nasdaq Composite | 17,726.94 |
| S&P 500 Index | 5,505.00 |
| CBOE Volatility Index | 16.52 |
| S&P GSCI | 555.84 |
| U.S. Dollar Index | 104.396 |
| 10-Year T-Note (Sep ’24) | 110-265 |
| Crude Oil WTI (Sep ’24) | 78.64 |
| Natural Gas (Sep ’24) | 2.165 |
| Gold (Aug ’24) | 2,399.1 |
| Silver (Sep ’24) | 29.299 |
| Corn (Dec ’24) | 404-6 |
| Wheat (Sep ’24) | 542-6 |
| Soybean (Nov ’24) | 1036-0 |
| Coffee (Sep ’24) | 238.20 |
| Sugar #11 (Oct ’24) | 18.66 |
| Cocoa (Sep ’24) | 7,689 |
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