Market Week: July 22, 2024

The Markets (as of market close July 19, 2024)

The market saw stocks come in with mixed returns. The Dow and the Russell 2000 advanced, while the Nasdaq, the S&P 500, and the Global Dow lost value. The Dow reached three new records during the week, while the Nasdaq and the S&P 500 posted their worst week since April. AI stocks led a downturn in tech shares as investors moved to small caps. The CrowdStrike outage impacted flights, banks, telecoms, and media companies worldwide. The market sectors ran the gambit of highs and lows, with energy (1.7%), financials (1.3%), and real estate (1.3%) climbing, while information technology (-4.6%) and communication services (-2.8%) declined. Ten-year Treasury yields rose 5.0 basis points. Crude oil prices declined on demand worries centered on China. The dollar inched up, while gold prices dipped lower.

Wall Street began last week on a high note, with each of the benchmark indexes listed here closing higher. The Dow reached a record high after climbing 0.5%. The Nasdaq gained 0.4%, the S&P 500 added 0.3%, while the big gainer was the Russell 2000, which advanced 1.8%. The Global Dow ticked down 0.2%. Ten-year Treasury yields rose 4.0 basis points to reach 4.81%. Crude oil prices fell $0.31 to settle at $81.90 per barrel. The dollar and gold prices rose 0.1% and 0.2%, respectively.

Stocks pushed higher for the second straight day last Tuesday. The small caps of the Russell 2000 gained 3.5%, followed by the Dow, which added 1.9% to record a new record. The S&P 500 rose 0.6%, the Global Dow advanced 0.5%, and the Nasdaq ticked up 0.2%. Industrial stocks made notable gains, while several companies reported better-than-expected second-quarter earnings. Yields on 10-year Treasuries slid to 4.16%. Crude oil prices fell again, closing at about $80.87 per barrel on weaker economic data from China. The dollar was unchanged, while gold prices rose 1.8%.

Last Wednesday saw the Dow (0.6%) continue its record streak, and the Global Dow ticked up 0.2%. The remaining benchmark indexes listed here declined, with the Nasdaq falling 2.8%, marking the worst day for that index since 2022. The S&P 500 dropped 1.4%, and the Russell 2000 lost 1.1%. Ten-year Treasury yields slid to 4.14%. Crude oil prices reversed a run of losses after gaining $2.14 to settle at $82.90 per barrel. The dollar fell 0.5%, and gold prices lost 0.3%.

Wednesday's tech rout continued last Thursday. The small caps of the Russell 2000 lost 1.9%, while the Dow, which had a run of record highs, fell 1.3%. The S&P 500 lost 0.8%, while the Nasdaq and the Global Dow declined 0.7%. Investors took profits from tech shares in response to the potential negative impact export restrictions to China may have on the semiconductor market. Yields on 10-year Treasuries climbed to 4.18%. Crude oil prices slid to $82.29 per barrel. the dollar gained 0.42%, while gold prices fell 0.7%.

Last Friday saw stocks close mostly lower, likely impacted by the CrowdStrike IT outage, which caused major disruptions worldwide. The Global Dow fell 1.0%, while the Dow fell 0.9%. The Nasdaq (-0.8%) and the S&P 500 (-0.7%) lost value for the third straight day. The Russell 2000 dropped 0.6%. Ten-year Treasury yields added 5.0 basis points to close at 4.23%. Crude oil prices dipped $2.56 to settle at $80.26 per barrel. The dollar inched up 0.2%, while gold prices fell 2.3%.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • Retail sales in June were virtually unchanged from the previous month but were up 2.3% from a year earlier. Retail sales less motor vehicle and parts and gasoline stations rose 0.8% in June. Retail trade sales dipped 0.1% in June but rose 2.0% from June 2023. Nonstore retail sales rose 1.9% in June and 8.9% over the last 12 months.

  • Import prices were unchanged in June after falling 0.2% in May. Lower import fuel prices in June offset higher nonfuel prices. Import fuel prices decreased 1.0% in June. Import prices advanced 1.6% for the year ended in June, the largest 12-month increase since December 2022. Export prices decreased 0.5% last month following a 0.7% drop in May. The May and June declines were the first one-month decreases since December 2023. Export prices advanced 0.7% over the past 12 months.

  • The number of residential building permits issued in June rose 3.4% from the May rate but were 3.1% below the June 2023 estimate. Building permits for single-family homes declined 2.3% last month. Housing starts increased 3.0% in June, while falling 4.4% over the last 12 months. Single-family housing starts slid 2.2% below the May figure. Housing completions in June were 10.1% above the May estimate and 15.5% over the June 2023 rate. Single-family housing completions in June were 1.8% above the prior month's estimate.

  • Industrial production rose 0.6% in June after advancing 0.9% in May. For the second quarter, industrial production increased 4.3%. Manufacturing output advanced 0.4% last month and 1.1% for the year. In June, mining rose 0.3%, and utilities increased 2.8%. Since June 2023, mining dipped 0.6%, while utilities advanced 7.9%. Total industrial production in June was 1.6% above its year-earlier level.

  • The national average retail price for regular gasoline was $3.496 per gallon on July 15, $0.007 per gallon above the prior week's price but $0.063 per gallon less than a year ago. Also, as of July 15, the East Coast price rose $0.016 to $3.466 per gallon; the Midwest price increased $0.002 to $3.369 per gallon; the Gulf Coast price advanced $0.052 to $3.110 per gallon; the Rocky Mountain price decreased $0.045 to $3.486 per gallon; and the West Coast price declined $0.035 to $4.191 per gallon.

  • For the week ended July 13, there were 243,000 new claims for unemployment insurance, an increase of 20,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended July 6 was 1.2%, unchanged from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended July 6 was 1,867,000, an increase of 20,000 from the previous week's level, which was revised down by 5,000. This is the highest level for insured unemployment since November 27, 2021, when it was 1,878,000. States and territories with the highest insured unemployment rates for the week ended June 29 were New Jersey (2.6%), Rhode Island (2.2%), California (2.1%), Minnesota (2.0%), Puerto Rico (2.0%), Pennsylvania (1.8%), Connecticut (1.7%), Massachusetts (1.7%), Washington (1.7%), Illinois (1.6%), Nevada (1.6%), and New York (1.6%). The largest increases in initial claims for unemployment insurance for the week ended July 6 were in Michigan (+10,578), New York (+5,247), Indiana (+2,835), Ohio (+1,604), and Tennessee (+1,166), while the largest decreases were in California (-5,672), New Jersey (-5,517), Georgia (-1,900), Texas (-1,809), and Minnesota (-1,078).

Eye on the Week Ahead

There's plenty of market-moving economic data out this week. June reports on sales of both new and existing homes are available. May saw sales of new homes rise, while existing home sales declined. The initial report for second quarter gross domestic product follows a 1.4% advance in the first quarter. The report on personal income and expenditures is also available this week. The personal consumption expenditures price index, a measure of inflation preferred by the Federal Reserve, was flat in May.

Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2024.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.

Market Week: July 15, 2024

The Markets (as of market close July 12, 2024)

Investors were encouraged by the most recent inflation data, raising expectations of an interest rate cut in September. Each of the benchmark indexes listed here closed the week in the black, led by the Russell 2000. The small-cap index recorded its best weekly performance since October 2023, while reaching its highest level since January 2022. The expectation of falling interest rates and economic strengthening likely prompted the market shift to more interest-sensitive small- and mid-cap stocks. The Dow rose above 40,000 at one point on Friday, ultimately closing at 40,000. The S&P 500 climbed above 5,600. Crude oil prices slipped lower. While prices at the pump may have risen nationally last week, as of July 1, weekly U.S. average gasoline prices actually declined $0.19 per gallon since the 2024 high on April 22, falling to $3.48/gallon on July 1, $0.05 per gallon less than the price a year ago. Increasing gasoline inventories, relatively weak demand, and oil prices below recent peaks contributed to falling gasoline prices.

Wall Street began the week with mixed results last Monday. The Nasdaq (0.3%) and the S&P 500 (0.1%) reached new record highs. The small caps of the Russell 2000 led the benchmark indexes listed here, climbing 0.6%. The Dow and the Global Dow dipped 0.1%. Ten-year Treasury yields inched lower to 4.26%. Crude oil prices fell $0.90 to $82.26 per barrel. The dollar edged up 0.1%, while gold prices fell 1.3%. Not surprisingly, the market sectors were also mixed last Monday. Information technology outperformed, while communication services fell over 1.0%.

Stocks were mixed last Tuesday. While the Nasdaq and the S&P 500 ticked up a mere 0.1%, it was enough to reach new record highs for both indexes. The Russell 2000, which had enjoyed a solid session the previous day, was unable to maintain that momentum after falling 0.5%. The Global Dow lost 0.3%, while the Dow dipped 0.1%. Fed Chair Jerome Powell spoke before the Senate last Tuesday and noted that more favorable data showing signs of cooling inflation could prompt the Fed to lower interest rates. Yields on 10-year Treasuries edged up to 4.30%. Crude oil prices fell for the second straight day, settling at about $81.59 per barrel. The dollar and gold prices moved higher.

The Nasdaq (1.2%) and the S&P 500 (1.0%) stretched their respective streaks of record highs to five straight sessions last Wednesday. This was the 37th record close for the S&P 500 in 2024 as it climbed above 5,600 for the first time in its history. The Dow and the Russell 2000 gained 1.1%, while the Global Dow advanced 0.6%. Big tech and AI stocks helped drive the market surge, while investors took encouragement from Fed Chair Jerome Powell's comments to the House Financial Services Committee. Ten-year Treasury yields fell to 4.28%. Crude oil prices reversed a period of declines, rising to $82.38 per barrel. The dollar slid 0.1%, while gold prices rose 0.4%.

The market was mixed last Thursday. The Russell 2000 gained 3.6%, the Global Dow rose 0.5%, and the Dow inched up 0.1%. The streak of record highs ended for the Nasdaq (-2.0%) and the S&P 500 (-0.9%). Megacap tech shares declined the furthest in over a year as investors, believing the Fed may cut interest rates as early as September, began to reshuffle their holding. Bond values increased, pulling yields lower, with the 10-year Treasury note falling to 4.19%. Crude oil prices jumped $0.74 to $82.84 per barrel. The dollar fell 0.6%, while gold prices rose 1.7%.

Stocks ended the week on a high note, with each of the benchmark indexes listed here posting gains last Friday. The Russell 2000 enjoyed another notable day of gains after climbing 1.1%. The Nasdaq, the S&P 500, and the Dow added 0.6%. The Global Dow gained 0.5%. Ten-year Treasury yields ticked lower for the third straight session, ending the day and the week at 4.18%. Crude oil prices fell $0.34 per barrel last Friday. The dollar and gold prices also closed the day lower.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • In what is most likely good news for investors looking for the Fed to lower interest rates, the June Consumer Price Index declined 0.1%. This is the first time since May 2020 that the CPI registered less than 0% for a month. Prices rose 3.0% over the last 12 months, a smaller increase than the 3.3% advance for the 12 months ended May. A 0.2% increase in prices for shelter was offset by a 2.0% drop in energy prices, within which gasoline prices declined 3.8%. Prices for shelter, which accounts for about one-third of the CPI basket of goods and services, have displayed a slowdown in price increases over the past few months. For the 12 months ended in June, prices for shelter rose 5.2%, down from 5.4% for the 12 months ended in May. Food prices rose 0.2% in June. Consumer prices less food and energy rose 0.1% in June after rising 0.2% the preceding month. Prices less food and energy rose 3.3% over the last 12 months, which was the smallest 12-month increase since April 2021.

  • Prices at the producer level advanced 0.2% in June after being unchanged in the previous month. Producer prices rose 2.6% for the 12 months ended in June, the largest advance since March 2023. The June rise in producer prices could be traced to a 0.6% increase in prices for services. In contrast, prices for goods decreased 0.5%. Nearly all the June increase in prices for services was attributable to a 1.9% jump in margins for trade services (the difference between wholesale and retail prices). Prices less foods, energy, and trade services were unchanged in June following a 0.2% advance in May. For the 12 months ended in June, prices less foods, energy, and trade services moved up 3.1%.

  • The Treasury budget deficit for June was $66.0 billion, well below the May deficit of $348.0 billion. For the current fiscal year, the total deficit is $1,268.3 trillion. The deficit over the same period in the last fiscal year was $1,393.0 trillion.

  • The national average retail price for regular gasoline was $3.489 per gallon on July 8, $0.010 per gallon above the prior week's price but $0.057 per gallon less than a year ago. Also, as of July 8, the East Coast price rose $0.061 to $3.450 per gallon; the Midwest price decreased $0.048 to $3.367 per gallon; the Gulf Coast price fell $0.013 to $3.058 per gallon; the Rocky Mountain price increased $0.080 to $3.431 per gallon; and the West Coast price declined $0.010 to $4.226 per gallon.

  • For the week ended July 6, there were 222,000 new claims for unemployment insurance, a decrease of 17,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 29 was 1.2%, unchanged from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended June 29 was 1,852,000, a decrease of 4,000 from the previous week's level, which was revised down by 2,000. States and territories with the highest insured unemployment rates for the week ended June 22 were New Jersey (2.4%), California (2.2%), Minnesota (2.1%), Puerto Rico (2.1%), Rhode Island (2.0%), Connecticut (1.8%), Pennsylvania (1.8%), Illinois (1.7%), Massachusetts (1.7%), and Washington (1.7%). The largest increases in initial claims for unemployment insurance for the week ended June 29 were in New York (+4,427), New Jersey (+2,557), Georgia (+1,849), California (+1,478), and Iowa (+1,270), while the largest decreases were in Connecticut (-1,831), Wisconsin (-875), Minnesota (-731), Maryland (-690), and Vermont (-534).

Eye on the Week Ahead

The retail sales report for June is available this week. Sales of goods and services to consumers ticked up 0.1% in May and 2.3% over the past 12 months. Another important report to consider this week is the Federal Reserve's index of industrial production for June. Industrial production and manufacturing rose 0.9% in May. Overall, industrial production is up 0.4% from May 2023, while manufacturing is up 0.1%.

Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2024.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.