Morning Market Preview for September 18th, 2024

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Good morning, Heroes!

Here’s your Morning Market Preview for September 23th, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports

• At 9:45 am US Services PMI and US Manufacturing PMI report, monthly reports that give insight into service and manufacturing activity.

Key  Earnings Reports & Events Today

• AAR Corp, Red Cat Holdings, and Phoenix Motors have their earnings calls today.
  
  
• Boeing’s strike continues, and the company has furloughed thousands of workers. Mechanics are saying they are ready for a long strike. The strike began on September 13th.

The Fed

• The Atlanta, Chicago, and Minneapolis Fed Presidents speak today, giving insight into the last Fed rate cut and possible insight moving forward for Mr Market.

Stocks

Year-to-Date Performance:

• Up Most: Tech is now up 27.44% this year. Utilities is second-best on the year, up 25.61%.
  
  
• Down Most: Important to know, no sectors are negative on the year. The smallest gain has been in Energy, up 5.69% this year. Second-to-last is Materials, up 9.59%.

5 Day Moving Average: 

• Up Most: 86% of Energy Large Cap stocks are now above their 5 day average. Tech is second now with 76% of its Large Caps above their 5 day average.
  
  

• Down Most: Real Estate is down, and only 26% of Large Caps are above their 5 day average. Next closest is Health Care with 32% of Large Caps above their 5 day average. 

Crypto

• Bitcoin: Up big recently, now over $63,000, which puts it at a staggering 52% gain on the year.
  
  
• Ethereum: It’s been a good couple of days for Ethereum again, and is nearly $2,600 now, which means a 12.5% gain on the year.
  
  
• Top Gainers Recently: Bitcoin and Litecoin have performed well recently, up about 2.2 to 3.3% in the last day.
  
  
• Important to note: Crypto markets are always open and prices change constantly.

Bonds

• 2-Year Treasury:  Yields continue to come down, now at 3.597%.
  
  
• 10-Year Treasury: Up a tick to 3.741%, but overall it’s had a decline this year too.
  
  
• The yield curve is no longer inverted, having un-inverted in late August, 2024.

Gold

• Price: Gold has had a great year, now over $2,600 per ounce, and up 27% on the year.

Real Estate

• 30-Year Fixed Mortgage Rate: Up just a bit, now to 6.15%. The mortgage rate has dropped about 7.8% this year.

Geopolitical Aspects

• Europe: Continued recovery with a focus on green energy, impacting commodity markets.
  
  
• Asia: Economic rebound in China post-COVID, influencing global manufacturing and tech sectors.
  
  
• Global Tensions: Ongoing trade negotiations and regional conflicts could sway investor sentiment, particularly affecting oil prices and defense stocks.

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    We’re the Guide.

P.S.

Continue reading, if you would enjoy some simple explanations of key concepts to level up your financial education

Each of these elements interacts, creating the dynamic we call 'the market'.

Understanding these aspects of the investing arena can help investors in making informed investment decisions.

You’re the Hero.
    We’re the Guide.

• PMI (Purchasing Managers' Index): This is like a health check for businesses. A number above 50 means more growth, below 50 indicates contraction. It's crucial because it shows if companies are buying more stuff, which suggests they're confident about future sales.
• Economic Reports: Data like jobless claims help predict economic health. For instance, rising claims might suggest economic slowdown.
• Jobless Claims: These are weekly reports that show the number of people filing for unemployment benefits. Higher numbers can indicate a weakening labor market.
• Housing Starts: This measures the number of new residential construction projects and is a key indicator of real estate market health.
• The University of Michigan's Consumer Sentiment Index measures consumer confidence through surveys, reflecting optimism or pessimism about personal finances and business conditions.
• Federal Reserve Rate Decisions: The Fed adjusts interest rates to either stimulate the economy (by lowering rates) or control inflation (by raising rates). Rate cuts can make borrowing cheaper, while rate hikes aim to curb inflation.
• Treasury Yields: The return on U.S. government bonds, often used as a measure of investor sentiment about future inflation and economic growth.
• Stock Sectors: Different sectors thrive in different economic conditions. Tech might boom during innovation, while energy could struggle with green shifts.
• Bonds and Yields: Bonds are safer than stocks but yield reflects risk or inflation expectations. Higher yields could mean investors demand more return.
• Cryptocurrency: Digital currencies like Bitcoin and Ethereum have been volatile but offer significant returns in 2024.
• Gold: A traditional safe-haven investment that often rises during times of uncertainty or when inflation is high.
• Real Estate: Influenced by rates, economic health, and demographic trends. Lower rates can inflate home prices due to increased buying power.
• Mortgage Rates: Higher rates make borrowing more expensive, which can cool down housing demand and affect real estate prices.‍
• 1 Basis Point (BPS) equals 0.01%. It’s easier to say “5 bips” than it is to say “zero point zero five percent.”

Good morning, Heroes!

Here’s your Morning Market Preview for September 9th, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports

• Wholesale Inventories and Consumer Credit for July are due today, offering insights into business stockpiling and consumer borrowing trends, respectively.

Key Events & Earnings Reports Today

• Mondays are similar to Fridays, and are typically light on earnings reports. Today is no different.

Limoneira Co

• Importance: Represents agricultural and food sectors, less volatile but indicative of consumer goods trends.
  
  
• Expectations: Steady growth expected due to consistent demand for agricultural products.

The Apple Event

• Importance: While not an earnings report, Apple's product announcements can significantly impact tech stocks.
• Expectations: Focus on AI, new hardware, and software could boost market sentiment.

The Goldman Sachs Communacopia & Tech Conference

• Importance: Insights from this conference often guide investor sentiment in the tech and finance sectors.
  
  
• Expectations: High anticipation for strategic announcements and partnerships.

The Fed

• Next Meeting: The Federal Reserve's next meeting is scheduled for later this month, September 17th and 18th. Markets are already pricing in a potential rate cut, influenced by recent economic data suggesting a slowdown.

Stocks

Year-to-Date Performance:

• Up Most: Utilities & Information Technology, driven by a cautious market looking for safe plays in Utilities and Tech Giants.
  
  
• Down Most: Energy and Consumer Discretionary, affected by global supply chain issues, geopolitical tensions, and a cautious collection of consumers.

5 Day Moving Average: This is the percent of Large Cap stocks above their 5 day average

• Up Most: Consumer Staples, as sentiment expects an economic slowdown
  
  

• Down Most: Energy, which has been a laggard all year, followed closely by Materials and Information Technology, suggesting the IT tides are turning in investor minds due to a large run up of Tech Giants.

Bonds

• 2-Year Treasury Yield: Open at 3.654%, down 55.03% this year.
  
  
• 10-Year Treasury Yield: Open at 3.713%, down 13.29% this year.

Crypto

• Bitcoin: $54,339, up 31.22% this year.
  
  
• Ethereum: $2,272, up 0.28% this year.
  
  
• Top Gainers Last Week: Solana (SOL) and Cardano (ADA), showing strong recovery and adoption in DeFi and smart contracts.

Gold

• Open Price: $2,490 per ounce, up 21.16% this year, driven by safe-haven buying amid economic uncertainties.

Real Estate

• 30-Year Fixed Mortgage Rate: Around 6.27%, down 6% this year.
  
  
• Trends: A cooling market with a shift towards more affordable housing options.

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Geopolitical Aspects

• Worldwide News: Tensions in the Middle East and trade talks between the US and China are key focuses, potentially affecting oil prices and global trade.

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.

‍

P.S. Simple Explanations of Key Concepts to Level Up Your Financial Education

- Economic Reports: These are government-released data points like job growth, inflation rates, or consumer spending. They help investors understand the economy's health, influencing market movements.

- Earnings Reports: Companies announce their financial performance quarterly. Investors look at earnings per share and revenue growth to gauge company health and future potential.

- The Federal Reserve: Often called "The Fed," it's the U.S. central bank. It sets interest rates, which affect borrowing costs for everyone from consumers to big businesses, impacting economic activity.

- Stock Sectors: The market is divided into sectors like tech or energy. Performance here can tell you where investors see growth or stability.

- Bonds & Yields: Bonds are loans to governments or corporations. Their yields (interest rates) move inversely to their prices. Higher yields can mean higher risk or inflation expectations.

- Cryptocurrency: Digital currencies like Bitcoin (BTC) and Ethereum (ETH). They're volatile but can offer high returns, often seen as speculative investments.

- Gold: Traditionally a safe investment during economic uncertainty. Its price often rises when markets are turbulent.

- Real Estate: Influenced by mortgage rates, economic health, and demographic trends. Lower rates typically mean easier buying, boosting the market.

- Geopolitical News: Events like trade wars or conflicts can disrupt markets by affecting oil prices, trade, or investor confidence.

Understanding these elements helps in navigating the financial markets, where each piece of information can be a puzzle piece in predicting market movements or making informed investment decisions.

You’re the Hero.
    We’re the Guide.

Let’s dive in:

Cryptocurrency Market

• Bitcoin: Bitcoin has been a standout performer, reaching new all-time highs and showing a year-to-date increase of approximately 42.23%. This surge is attributed to several factors, including the anticipation and eventual approval of Bitcoin ETFs, which has brought a wave of institutional investment into the crypto market. The Bitcoin halving event, expected to reduce the supply of new Bitcoins entering the market, has also contributed to its price appreciation.
• General Sentiment: The crypto market has seen increased mainstream acceptance, with a growing correlation between Bitcoin and traditional financial markets like the S&P 500, indicating its integration into broader investment portfolios. The market's expansion is further evidenced by the projected growth of the worldwide cryptocurrency market, expected to hit $51.5 billion in 2024.

Real Estate

• Market Dynamics: Real estate has experienced mixed fortunes. Globally, the market is projected to grow, with residential real estate dominating. However, in terms of performance, real estate ETFs have seen declines, with a notable decrease of about -4.03% year-to-date. This could be attributed to shifts in work patterns, with remote work reducing demand for commercial spaces in urban centers, while suburban and rural properties see increased interest.
• Cryptocurrency Influence: There's an emerging trend where cryptocurrencies are influencing real estate transactions, with properties being priced in or purchased with digital currencies. This integration suggests a future where real estate might be more closely tied to the crypto market's volatility and growth.

Traditional Markets

• Stock Markets: The S&P 500 and other major indices like the Dow Jones and NASDAQ have hit all-time highs, reflecting a robust economic recovery and optimism. Sectors like technology, communication services, and utilities have led the gains, driven by technological advancements, particularly in AI, and the ongoing digital transformation across industries.
• Sector Performance: Technology stocks, buoyed by AI and big data, have seen significant increases, with companies like NVIDIA leading the charge. Conversely, sectors like real estate and long-term bonds have underperformed, reflecting broader economic shifts towards technology and away from traditional asset classes.

Economic Context

• Inflation and Interest Rates: Inflation has shown signs of cooling, influencing expectations around Federal Reserve actions. This has led to a cautious optimism in markets, with investors balancing between growth stocks and more defensive sectors.
• Global Influences: The economic performance has been influenced by global factors, including geopolitical tensions and economic policies, which have introduced volatility but also opportunities, especially in sectors like technology and commodities.

Conclusion

The year-to-date performance in 2024 highlights a market adapting to new economic realities, with cryptocurrencies playing a more significant role, not just as an investment but as a transactional medium in real estate. Traditional markets continue to thrive, driven by technological innovation and economic recovery, though with a nuanced performance across different sectors. This landscape suggests a diversification of investment strategies, embracing both the digital asset boom and traditional market

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.