Mid-Week Market Minute 10.16.24

October 16, 2024 Market Updates

Stocks Mixed; Retail Sales Data Coming Thursday

Stocks were mixed in early trading this week as U.S. stocks continued to trade at near-record levels. As of Wednesday, both the S&P 500 (U.S. Large Cap Index) and Russell 2000 (U.S. Small Cap Index) were higher by about 0.60%. International markets lagged, with the MSCI EAFE lower by about 0.4%. 

We are in the early innings of third-quarter earnings season with about 10% of the S&P 500 companies having reported results. Markets were bolstered this week by generally upbeat earnings from the financial sector, with major U.S. banks citing a surge in investment banking revenues. In aggregate, forecasts are looking for earnings growth for the third quarter to come in between 2-3% on a year-over-year basis, which would mark the fifth consecutive quarter of positive year-over-year earnings growth for the S&P 500.

On the data front, the average 30-year mortgage rate rose from 6.13% to 6.52% over the past three weeks, resulting in a sharp 35.2% decline in mortgage refinance activity and a 6.6% decline in purchase applications during that same period. This comes as investors continue to dial back their expectations for future rate cuts by the Fed, pushing interest rates higher over the past few weeks.

Looking ahead, the markets will get a glimpse into the health of the U.S. consumer in the form of retail sales data on Thursday of this week. Retail sales for September are expected to show an increase of 0.3%, well above last month’s reading of 0.1%. The strength of the consumer remains a crucial factor in the forward-looking trajectory of the economy, accounting for approximately two-thirds of U.S. GDP.

Source: GSAM, CNBC, JPMorgan, FactSet

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