Please take a moment and register for our member’s only webinar, September 2024 Outlook and Update on Wednesday September 4, 2024, at 2:00 PM EDT here:
Please join us for an Almanac Investor Member’s Only discussion of recent market action with time for Q & A at the end. Jeff and Chris will cover their outlook for September, review the Tactical Seasonal Switching Strategy ETF, Sector Rotation ETF, and Stock Portfolio holdings and trades. We will also share our assessments of the Fed, inflation, the election as well as relevant updates to seasonals now in play.
If you are unable to attend the live event, please still register. Within a day of completion, we will send out an email with links to access the recording and the slides to everyone that registers.
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Market at a Glance
8/22/2024: Dow 40712.78 | S&P 5570.64 | NASDAQ 17619.35 | Russell 2K 2150.03 | NYSE 18850.85 | Value Line Arith 10543.45
Seasonal: Bearish.
September is the worst month of the year for DJIA, S&P 500, NASDAQ and Russell 2000. In election years, September’s overall rank improves slightly to third worst month for DJIA, S&P 500, and NASDAQ, fourth worst for Russell 2000. With the exception of Russell 2000, average performance in election years remains negative. DJIA has the weakest election-year September record, down 11 of the last 18, average loss 0.5%.
Fundamental: Adequate. Inflation is slowly cooling, but still above the Fed’s stated 2% target. Unemployment is creeping higher and is currently at 4.3% while apparently 818,000 jobs were revised away earlier this week. Economic growth is slowing and the Atlanta Fed’s GDPNow model is forecasting just 2.0% growth in Q3. Corporate earnings for Q2 were broadly better than expected, but there were still some disappointments. Odds for a soft economic landing still remain favorable but could quickly fade if data weakens substantially or the Fed delays too long.
Technical: Bouncing. DJIA, S&P 500 and NASDAQ have recovered much of the ground lost in late-July and early August but have stalled below previous all-time highs. Early August lows have not been tested yet. Until DJIA, S&P 500 and NASDAQ break out to new all-time highs, a retest of recent closing lows cannot be ruled out. Levels to watch are around: DJIA 38700, S&P 500 5190, and NASDAQ Comp 16200.
Monetary: 5.25 – 5.50%. Will the Fed finally cut? Will it be just a small 0.25% or a larger 0.50% decrease. We will likely all find out on September 18, the next time a Fed meeting ends. Without a crisis or some other calamity, we would bet on the smaller 0.25% cut. There did not seem to be much of a rush by the Fed to increase interest rates when inflation was surging. It seems reasonable that the same lack of urgency is likely with inflation slowly declining and still above 2%.
Sentiment: Neutral. According to
Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 50.0%. Correction advisors were at 28.1% while Bearish advisors numbered 21.9% as of their August 21 release. This is a substantial retreat in bullishness from mid/late-July readings and includes a bounce in the percentage of bulls following last week’s gains. Lacking an extreme reading in either direction, sentiment readings currently offer little insight other than the possibility that July’s extreme bullishness marked an interim top.