Market Insights

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Check out our next “State of the Market,” on Monday, 8/12. (Time now at at 2 p.m. ET.)

Sizing Up the S&P 500

• S&P 500 rebounds to 50-day MA, erasing more than 50% of its peak-to-trough decline
• Potential resistance with falling trendline and 8/1 bearish outside day
• Potentially important levels:
  • 7/25 low of 5391
  • 8/2 low of 5302
• Lack of catalysts, “dog days” of summer may create difficult period through Labor Day.

News & Views

• Value moves continue:
  • SBUX rallies on CEO change
  • K acquired
  • CSCO rallies on cost cuts
• Inflation:
  • CPI under 3% for 1st time in 3+ years
  • PPI +2.2% vs +2.6% estimate
• Reuters/S&P Global: AI boosting data centers’ long-term electricity demand by about 50%, according to utility companies.
• Dan Ives of Wedbush: Channel checks may suggest iPhone “super cycle” is starting.
• OPEC, IEA cut oil demand forecasts amid Chinese weakness
• FactSet: Q2 revenues growing the fastest since Q4 of 2022
• Mortgage applications: Biggest refi activity since pandemic

Examining Sentiment

• University of Michigan’s consumer sentiment index is at levels comparable to the recession year 1982, despite the “misery index” (unemployment + CPI) being less than half 1982’s reading.
  • Notice how 1995 and 2005 had higher sentiment despite higher misery index readings.
• Unhappiness about inflation and politics have contributed to the negativity.
• Does this create potential for increased optimism and risk appetite?
  • Retail money market fund balances +90% from May 2023-July 2024, even with S&P 500 +32% in that period.

Upcoming Events

• Fri 8/16: Housing starts, consumer sentiment
• Tues 8/20:
  • Earnings: LOW
• Wed 8/21: Crude oil inventories, Fed minutes
  • Earnings: TGT M SNOW
• Thu 8/22: Jobless claims
• Note: Powell may speak at Jackson Hole on Fri 8/23

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Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.