Weekly Update – August 5, 2024
The Week on Wall Street
Stocks fell broadly last week as investors looked past upbeat Fed comments and focused on disappointing corporate reports and weaker-than-expected economic data.
The Dow Jones Industrial Average lost 2.20 percent, while the Standard & Poor’s 500 Index fell 2.06 percent. The Nasdaq Composite Index dropped 3.35 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.19 percent for the week through Thursday’s close.1
Volatile Week of Trading
Stocks were under pressure early in the week as investors appeared to focus on the Fed’s meeting, which ended on Wednesday. It was a big week for Q2 corporate reports, with five of the ten largest names in the S&P 500 (by market capitalization) reporting numbers. But attention was mainly on the Fed’s meeting.2,3
Stocks rallied on Wednesday when Fed Chair Powell indicated a September interest rate cut was “on the table.”4
But selling picked up on Thursday as investors’ attention quickly shifted to disappointing corporate reports and weak economic data. Friday morning’s disappointing June jobs report raised even more concerns about the economy’s strength. The Nasdaq ended the week in correction territory, down more than 10 percent from its recent all-time high.5,6
Economic Concerns
Fresh economic data suggested weakening manufacturing, construction, and employment outlooks. On Friday, the Labor Department’s July jobs report showed a sharper-than-expected job growth slowdown and an unemployment uptick to 4.3 percent—the highest rate in 2½ years.
At Wednesday’s Fed press conference, investors welcomed Powell’s unusually candid and upbeat comments. However, as the week progressed, investors started questioning whether the Fed was misreading the economy and moving too slowly in adjusting interest rates.7
THIS WEEK: KEY ECONOMIC DATA
Monday: ISM Services Index. Fed Official Mary Daly speaks.
Tuesday: International Trade in Goods and Services. Treasury buyback announcement.
Wednesday: Consumer Credit. EIA Petroleum Status Report.
Thursday: Jobless Claims. Fed Balance Sheet.
THIS WEEK: COMPANIES REPORTING EARNINGS
Tuesday: Amgen Inc. (AMGN), Caterpillar Inc. (CAT), Uber Technologies,
Inc. (UBER), Airbnb, Inc. (ABNB)
Wednesday: The Walt Disney Company (DIS)
Thursday: Eli Lilly and Company (LLY), Gilead Sciences, Inc. (GILD)
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1. The Wall Street Journal, August 2, 2024
2. The Wall Street Journal, August 2, 2024
3. S&P Global, July 31, 2024
4. The Wall Street Journal, July 31, 2024
5. The Wall Street Journal, August 1, 2024
6. CNBC.com, August 2, 2024
7. The Wall Street Journal, August 2, 2024