Please take a moment and register for our member’s only webinar, October 2024 Outlook and Update on Wednesday October 2, 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 October, review the Tactical Seasonal Switching Strategy ETF, Sector Rotation ETF, and Stock Portfolio holdings and trades. We will also share our assessments of the economy, 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.
After registering, you will receive a confirmation email containing information about joining the webinar and a reminder message.
Market at a Glance
9/26/2024: Dow 42175.11 | S&P 5745.37 | NASDAQ 18190.29 | Russell 2K 2209.87 | NYSE 19501.72 | Value Line Arith 10995.10
Seasonal: Bearish. October is the worst month in election years ranking last for DJIA, S&P 500, and NASDAQ. It is the second worst month for Russell 2000. Average election-year losses range from –0.9% by S&P 500 to –2.4% from Russell 2000. Steep losses in election year 2008 drag on average performance, but even excluded weakness still prevails. However, in the last 21 years, October has been fair ranking fourth best for DJIA, S&P 500 and NASDAQ, sixth best Russell 2000.
Fundamental: Softish Landing. Today’s third estimate of Q2 GDP was in line with expectations at 3% and the Atlanta Fed’s GDPNow model is forecasting 2.9% in Q3 as of its September 18, update. Inflation metrics continue to trend lower but are still above the Fed’s stated 2% objective. The Fed has cut interest rates and employment data, though softer, is holding up. Q3 corporate earnings were broadly better than expected however, Q4 estimates have been retreating. Provided data does not weaken significantly, it appears the economy is headed for a soft landing.
Technical: Divergent. DJIA and S&P 500 have broken out to new all-time highs, NASDAQ has not. Small-cap stocks, measured by Russell 2000, are also struggling. Weekly breadth data suggests a rising tide, but it has not lifted all yet. Rate cuts were widely expected to aid small caps, yet there has been little sustained progress by Russell 2000. With NASDAQ approaching resistance at its previous all-time highs, it could take a period of consolidation before it can finally breakout.
Monetary: 4.75 – 5.00%. The Fed finally cut, and they went bigger than we had expected by trimming 0.50% off of its target rate. Interest rates are now in a new easing cycle. Historically this has been bullish for markets, but there are limits. Large reductions (
more than 2% in a year) have generally been accompanied by rapidly deteriorating economic and financial conditions that resulted in considerable market losses.
Sentiment: Mixed. According to
Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 52.5%. Correction advisors were at 24.6% while Bearish advisors numbered 22.9% as of their September 25 release. While the number of bulls has increased so has the number of bears. This has narrowed the spread between the two to a point that has historically been associated with less risk. This does not square with recent market volatility. Until sentiment readings approach or reach an extreme, other indicators may provide better insight.