Mid-Week Market Minute 7.31.24

Stocks Mixed; Jobs Report on Friday

Global stocks were mixed in early trading this week as investors digested second-quarter earnings results ahead of the widely anticipated Federal Reserve meeting on Wednesday. The S&P 500 was lower by about 0.5% as of Wednesday morning, while the tech-heavy Nasdaq was lower by more than 1%. Meanwhile, the Dow Jones Industrial Average was higher by about 0.4%, reflecting the ongoing rotation from growth to value stocks over the past month. As we enter the final trading day of July, we’ve seen a wide dispersion in market returns. The Russell 2000 (small cap index) is on pace to finish the month higher by nearly 10%, while the S&P 500 is on pace for a modest loss of 0.4%. On the International front, emerging market stocks were lower on the month by about 0.80%, while international developed stocks were on pace to finish the month higher by more than 1%. 

Looking forward, investors will shift their attention to the conclusion of the Federal Reserve meeting on Wednesday afternoon, where the central bank is widely expected to leave benchmark interest rates unchanged at the current target range of 5.25%-5.50%. Still, investors will be paying close attention to Fed Chair Jerome Powell’s news conference following the decision. With just three policy-setting meetings on the calendar this year after July, the futures markets are pricing in the near certainty of a 25-bps rate cut at the next meeting on Sept. 15, followed by an additional cut in either November or December. 

On the data front, nonfarm payrolls, the most widely followed jobs report, are due out on Friday. The U.S. economy is expected to show job gains of 175,000 for the month, while the unemployment rate is expected to remain unchanged at 4.1%. Elsewhere, we will continue to monitor second-quarter earnings, with several mega-cap stocks due to report results later this week. So far, earnings season has been relatively strong, with around 80% of S&P 500 companies surpassing analyst expectations thus far.

Source: GSAM, CNBC, JPMorgan, FactSet

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