Weekly Market Performance — October 25, 2024

Jeff Buchbinder | Chief Equity Strategist

Last Updated:

Additional content provided by Brian Booe, Associate Analyst, Research.

LPL Research provides its Weekly Market Performance for the week of October 21, 2024. Major U.S. indexes ended the week mixed, as the S&P 500 snapped a string of weekly gains while the Nasdaq Composite delivered a solid weekly advance. Earnings season kicked into high gear, highlighted by the first Magnificent Seven report and over 20% of S&P 500 companies announcing results. Nonetheless, a strong rise in Treasury yields was the primary headwind for equities, as the bond market continued to price out the Federal Reserve’s (Fed) rate cut path in the wake of stronger-than-expected economic data. Elsewhere, commodities trading was choppy amid increasing focus on the rapidly approaching U.S. election, while gold pulled back from record highs.

Stock Index Performance

Index

Week-Ending

One Month

Year to Date

S&P 500

-1.01%

1.45%

21.71%

Dow Jones Industrial

-2.59%

0.57%

11.85%

Nasdaq Composite

0.32%

2.58%

23.56%

Russell 2000

-2.95%

0.52%

8.97%

MSCI EAFE

-2.59%

-3.38%

5.93%

MSCI EM

-1.80%

0.10%

12.15%

S&P 500 Index Sectors

Sector

Week-Ending

One Month

Year to Date

Materials

-3.78%

-1.21%

10.02%

Utilities

-1.62%

0.49%

27.17%

Industrials

-2.76%

0.93%

18.66%

Consumer Staples

-0.64%

-1.33%

14.87%

Real Estate

-1.06%

-1.13%

10.33%

Health Care

-2.90%

-2.67%

8.97%

Financials

-2.08%

4.09%

23.83%

Consumer Discretionary

0.92%

0.09%

13.56%

Information Technology

0.42%

3.74%

33.81%

Communication Services

-0.02%

1.92%

28.29%

Energy

-0.52%

3.16%

8.06%

Fixed Income and Commodities

Indexes and Commodities

Week-Ending

One Month

Year to Date

Bloomberg US Aggregate

-0.74%

-2.13%

2.22%

Bloomberg Credit

-0.86%

-2.01%

3.14%

Bloomberg Munis

-1.10%

-1.34%

0.83%

Bloomberg High Yield

-0.40%

-0.32%

7.43%

Oil

3.57%

2.87%

0.06%

Natural Gas

13.99%

-2.39%

2.39%

Gold

0.85%

3.30%

33.04%

Silver

-0.15%

5.83%

41.48%

Source: LPL Research, Bloomberg 10/25/24 @2:30 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: After logging six straight weekly gains and a fresh all-time high last Friday, stocks took a breather as major indexes closed the week mostly lower. Corporate results and fluctuating Treasury yields drove equities this week amid a light macro calendar. The benchmark S&P 500 closed the week 1% lower and the Dow also shed over 2.5% during the last five sessions. However, the Nasdaq Composite was able to add 0.2% as growth names outperformed value this week, while small caps slumped. 

Last week marked only the second six-week winning streak for the S&P 500 since the pandemic. But, this run came to an end as the index failed to find positive territory until Thursday, logging back-to-back daily losses for the first time since September. The moderate risk-off tone came as 112 S&P 500 companies reported earnings results, colliding with a rush of corporate headlines — although the jump in Treasury yields over the first half of the week was credited with being the main headwind for equities. Earnings season ramped up, and Tesla (TSLA) kicked off Magnificent Seven reports with a bang – a 20% upside surprise on third quarter estimates powered the electric-vehicle giant nearly 22% higher the following session. Additional earnings highlights included the economic barometer United Parcel Service (UPS) topping estimates with profit growth for the first time in nearly two years, and General Motors (GM) jumped on an earnings beat. On the other side of the coin, lackluster results from Boeing (BA) and Coca-Cola (KO) failed to excite. Among corporate highlights, shares of McDonald’s (MCD) slumped after an E. coli outbreak was tied to their Quarter Pounder hamburgers. Additionally, shares of Starbucks (SBUX) dropped after suspending 2025 guidance, while Arm Holdings (ARM) canceled a chip design license which allowed longtime partner Qualcomm (QCOM) to use intellectual property.     

International Equities: European equities ended the week lower, as the STOXX 600 slipped over 1%. Sentiment was cloudy as rising growth concerns lingered, especially for France and Germany, paired with uncertainties around the U.S. election spilling over. Among macro highlights, Purchasing Managers’ Index (PMI) data drew investor attention, as France missed estimates on both services and manufacturing results, but German results were slightly better than expected for both. Generally mixed corporate earnings were also front and center, headlined by German software behemoth SAP beating estimates and slightly increasing guidance. Swiss electronics maker Logitech and Danish logistics heavyweight Maersk also surprised to the upside, while consumer brands struggled. Mercedes-Benz missed forecasts on weak demand from China, while cosmetics maker L’Oreal missed sales expectations.  

Major indexes in Asia closed mostly lower, lacking direction and major catalysts for most of the week. Market-watchers debated the depth and impact of the recent stimulus measures in China, as banks cut one- and five-year lone prime rates by 0.25% on Monday, and the People’s Bank of China (PBOC) left one-year medium-term lending facility rates unchanged on Friday. Stocks in mainland China were able to print weekly gains, while Hong Kong ended lower on falling property stocks. Indexes in Japan closed over 2.5% lower as uncertainties around its own general election loomed, and dovish central bank comments and easing inflation data did little to boost markets. Taiwan and South Korea closed lower, as did indexes in India and Southeast Asia.  

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index ended the week lower after a notable advance in yields through Wednesday. The rate-sensitive two-year yield added 13 basis points over the last five sessions, while the 10-year yield also gained 13 basis points. Yields have been rising recently on better-than-feared economic data, which is pricing out Fed rate cuts. However, adding to the early-week selloff was the return of the Treasury term premium. The term premium recently turned positive again as investors are requiring additional compensation for owning longer-maturity Treasuries. Near-term catalysts are unlikely to reprice Fed policy expectations dovishly, and political developments are likely to dominate price action as we approach November, so yields could continue to climb higher in the interim (absent a financial shock).  

With the increase in Treasury yields of late, benchmark yields for both investment grade and high yield corporate credit have increased from recent lows resulting in, primarily, institutional investors taking advantage of the recent back-up in yields. As a result, credit spreads (the additional compensation for owning riskier debt) remain near secular tights with spreads in single-digit percentiles relative to history (the lower the percentile ranking, the more expensive the asset class). Current valuations are likely warranted given the path of fundamentals and the still strong economy, but long-run excess returns will almost surely be low. Nonetheless, despite still solid fundamentals in general, given extremely tight valuations, corporate credit markets remain unattractive on a tactical basis, in our view. 

Commodities and Currencies: The Bloomberg Commodities Index traded higher on the week as markets traded nervously with less than two weeks until the U.S. election. Elevated volatility for West Texas Intermediate (WTI) crude lingered, although prices remained rangebound during an up-and-down week, ending 3.5% higher. This week’s choppy price action stemmed from fluctuating supply risk from Middle East tensions, alongside views that the market will enter a surplus in 2025 on slower demand growth and higher output. Gold ended 0.7% higher, also experiencing choppy trading, due to profit taking amid a possible technical correction after recent runs to record highs. Meanwhile, silver and copper ended the week slightly lower. Among currencies, despite trimming weekly gains, the dollar strengthened against its peers, finding support from central banker remarks around a slower rate cutting pace, and on yen weakening ahead of Japan’s general election this weekend, which could complicate the Bank of Japan’s (BOJ) path for normalizing rates.  

Economic Weekly Roundup

A quiet macro calendar did little to move markets this week, however, economic results were noted by market watchers. Manufacturing and services flash PMI for October beat estimates by 0.3 points each, despite the expectation for services to contract, powering the composite reading past estimates (54.8 actual vs. 53.8 expected). Also released Thursday, initial jobless claims dropped by 15,000 to 227,000 last week, reassuring investors that the impact of Hurricane Helene is dissipating faster than expected, although the number of those continuing to claim benefits continued to rise more than forecasted. Additionally, new home sales in September increased to 738,000 versus 720,000 expected, while the previous three months’ new home sales data was revised down by 41,000. Thursday’s slate of data was broadly perceived as not too good or too bad, but still underscoring a resilient U.S. economy and a slowly cooling labor market.  

Friday’s University of Michigan Sentiment report was another bright spot, as one-year inflation expectations were revised down to 2.7% from 2.9%, while longer-term expectations remained at 3%. Consumer sentiment was revised higher as consumers feel current conditions are better than originally reported. Interestingly, more consumers think it’s a bad time to buy but also a bad time to sell a house, so investors should expect a softer real estate market in the near term. Overall, despite rising concerns about income growth and employment, consumers feel confident that inflation is easing. 

The Week Ahead

The following economic data is slated for the week ahead:    

  • Monday: Dallas Fed Manufacturing Activity (Oct) 
  • Tuesday: Wholesale Inventories (Sep preliminary), Advance Goods Trade Balance (Sep), Retail Inventories (Sep), FHFA House Price Index (Aug), S&P Case-Shiller 20-City House Price Index (Aug), S&P Case-Shiller U.S. House Price Index (Aug), JOLTS Job Openings (Sep), Conference Board Consumer Confidence (Oct), Conference Board Present Situation (Oct), Conference Board Expectations (Oct), Dallas Fed Services Activity (Oct) 
  • Wednesday: MBA Mortgage Applications (Oct 25), ADP Employment Change (Oct), GDP Annualized (3Q advance), Personal Consumption (3Q advance), GDP Price Index (3Q advance), Core PCE Price Index (3Q advance), Pending Home Sales (Sep) 
  • Thursday: Challenger Job Cuts (Oct), Employment Cost Index (3Q), Personal Income (Sep), Personal Spending (Sep), Real Personal Spending (Sep), PCE Price Index (Sep), Core PCE Price Index (Sep), Initial Jobless Claims (Oct 26), Continuing Claims (Oct 19), MNI Chicago PMI (Oct) 
  • Friday: Change in Nonfarm Payrolls (Oct), Two-Month Payroll Net Revision (Oct), Change in Private Payrolls (Oct), Change in Manufacturing Payrolls (Oct), Unemployment Rate (Oct), Average Hourly Earnings (Oct), Average Weekly Hours All Employees (Oct), Labor Force Participation Rate (Oct), Underemployment Rate (Oct), S&P Global U.S. Manufacturing PMI (Oct final), Construction Spending (Sep), ISM Manufacturing (Oct), ISM Prices Paid, ISM New Orders (Oct), ISM Employment (Oct), Wards Total Vehicle Sales (Oct) 
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Jeff Buchbinder

Jeff Buchbinder, CFA, provides the top-down view of the stock market for LPL Financial Research. He has over 25 years of experience in equities.