Transcript: Hello everyone, I will share the quarterly market insights for Q3 2024.
Stocks posted solid gains in the third quarter as investors welcomed the Fed’s decision regarding interest rates. The Dow Industrials tacked on more than 8%, while the S&P 500 rose 5.5%. The Nasdaq Composite lagged, however, gaining just over 2.5%.
Stocks were mixed in July despite economic data that seemed to mark a turning point in the Fed’s view on interest rates. Investors eventually became more confident that inflation was slowing as anticipation built around a potential rate adjustment.
August opened with troubling news. First, the July jobs report disappointed, then concern shifted to overseas markets as news out of Japan pressured global financial markets. But stocks rebounded by mid-month on upbeat inflation reports.
In September, markets were volatile as investors waited for the Fed meeting. Stocks initially fell on news that the Fed cut short-term rates by 0.5% – the first reduction in four years – but then rallied. The Dow topped 42,000 for the first time during the month, while the S&P crossed the 5,700 mark.
What’s ahead? What investors may be talking about in October?
In October, there is no scheduled Fed meeting, so expect some attention to shift to the housing market now that Fed Chair Powell has confirmed that “the time has come for policy to adjust.” Mortgage rates have been trending lower since hitting a peak a year ago. Loan rates may continue to move lower since Powell said that “the direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” There is a group of existing homeowners who may have delayed mortgage decisions in recent years because they don’t want to leave a low-interest rate home loan. If mortgage rates trend lower, some homeowners may reach a higher level of comfort making a move.
Let’s see how it goes in the next few months and we will provide the market recap for 2024 in January.