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Trick or Treat“All that we see or seem is but a dream within a dream.” — Edgar Allan Poe,The trickMega cap tech results ...
31/10/2024

Trick or Treat

“All that we see or seem is but a dream within a dream.” — Edgar Allan Poe,

The trick
Mega cap tech results spooked investors and are driving the market down for a second consecutive day. Big tech earnings so far this week have been a mixed bag. While Alphabet shares rose nearly 3% on Wednesday after the company reported strong revenue growth, chipmaker AMD fell more than 10% as investors were disappointed by the company's guidance for the fourth quarter.
Tech earnings continues on Thursday with results from tech giants Apple and Amazon.

"Growth up, inflation down is precisely what you want to see," said Jamie Cox, managing director at Harris Financial Group. "The Fed doesn't need to be afraid of a stable and growing economy to normalize rates this cycle so long as disinflation persists." — CMBC

The treat
On a yearly basis, overall PCE increased 2.1%, its slowest pace since February 2021. The report comes just one week before the Federal Reserve will dole out its next policy decision. After cutting rates by half a percentage point in September, markets have priced in a roughly 96% chance the central bank opts for a smaller 25 basis point interest rate cut on Nov. 7, per the CME FedWatch Tool.

Thursday's reading on inflation follows up September's Consumer Price Index (CPI), which showed prices rose at their lowest annual headline rate since February 2021. — Yahoo Finance

Down the Shore we are Treating ourselves to the wonders of our local shell elf and his artistic flair, welcoming the return of the majestic spoiled bass and whales to our waters in an attempt to Trick ourselves into believing that all is well in Stock Market land. Make it a spooky day.

Mortgage demand stalls as interest rates surge higher ahead of electionMortgage rates rose last week for the fourth time...
30/10/2024

Mortgage demand stalls as interest rates surge higher ahead of election

Mortgage rates rose last week for the fourth time in five weeks, causing another pullback in refinancing. Total mortgage application volume was essentially flat, falling 0.1% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.73% from 6.52%, with points rising to 0.69 from 0.64 (including the origination fee) for loans with a 20% down payment. That is the highest level since July of this year.

Applications to refinance a home loan dropped 6% for the week but were 84% higher than the same week one year ago, when the 30-year fixed was 113 basis points higher.

“Expect volatility potential to remain elevated through the 2nd half of next week at the very least with each day between now and then at risk of fairly substantial movement,” wrote Matthew Graham, chief operating officer at MND. “The riskiest days are this Friday, next Wednesday, and next Thursday due to the jobs report, election, and Fed announcement.” — CNBC

First guess is best guess If not, grin and bear it!“Better them than me!” appears apropos for this week’s stock market p...
30/10/2024

First guess is best guess If not, grin and bear it!

“Better them than me!” appears apropos for this week’s stock market punters. Elections are a week away, earnings are going full tilt, investors want to protect what they have while participating in the upside, but only on dips! (Good luck with that; we can do the miraculous instantaneously, the impossible takes a little longer), and it is a chocker block week of the meatier side of economic releases. As of this writing the market is rope-a-doping a little. Pass the Pepto!

“Inflation-adjusted, or real, gross domestic product grew at an annualized rate of 2.8% over the three months ended in September, according to the first estimate by the Bureau of Economic Analysis released Wednesday. The consensus call among economists surveyed by FactSet was for growth of 2.6% in the third quarter, though Bloomberg’s forecast was for 2.9%.

Wednesday’s solid third-quarter growth is a tick slower from real GDP growth of 3% during the second quarter. The economy expanded 1.6% during the first three months of the year.

Last quarter, Americans increased their purchases in both goods and services. Within goods, the biggest areas of spending were vehicles, auto parts, and prescription drugs. Services spending was more concentrated in healthcare, as well as dining and accommodations, the bureau noted.
Government spending rose by 5% during the third quarter, up from the 3.1% gain in the second quarter. Much of the recent increase was driven by military spending, and was concentrated in goods purchases, according to the bureau.

While consumer and government spending were robust over the past three months, sluggish private inventories and residential investment weighed on economic growth.

Wednesday’s release of third-quarter real GDP is, however, just the initial estimate. The bureau will release a second estimate based on more complete data on Nov. 27, 2024.” — Barrons

Down the Shore we are smiling and dialing trying to get a bead on the real scoop. Mother Teresa, God be good to her, always spoke of the far reaching, long lasting effects of a simple smile. On the Street, a smile and a token will get you on the subway. Make it a smiley day.

What the Fed gives, the Fed can take away Nowadays that means interest-rate cuts. The U.S. Federal Reserve’s half-point ...
29/10/2024

What the Fed gives, the Fed can take away

Nowadays that means interest-rate cuts. The U.S. Federal Reserve’s half-point rate cut in September gave the stock market just what it wanted. Now the market wants more — and expects it.

But the latest U.S. jobs report and other economic indicators have thrown the market’s confident “soft-landing” scenario into disarray. There’s growing concern among investors that the Fed has not tamed inflation completely. If that’s so, then inflation will stay higher for longer — squeezing consumers, elevating bond yields and home mortgage rates, and putting additional Fed rate cuts on hold.

Wall Street is trying to tell you that inflation is going down towards 2%. At Hedgeye, we don’t agree. Inflation is going back up. It hit its low in the September report and now we think it’s going back towards 3%. We’ll be at 3.1% by the beginning of next year.

I mean, food prices are up double-digits, and all these things are going right back up because that’s what happens when the Federal Reserve signals a devaluation of the U.S. dollar and an increase in the money supply.

If your response to declining economic conditions and falling markets is to print money, then you bring back the thing that you’re trying to kill, which is inflation. The U.S. dollar in the past 25 years alone has been devalued by 78%. The Fed provided a lot of easy money for a lot of people to use leverage on top of that easy money. And people get inflation. — Keith McCullough, Hedgeye Risk Management.

Power to the People/consumerStock futures are taking a breather this morning while trying to figure out what gets top bi...
29/10/2024

Power to the People/consumer

Stock futures are taking a breather this morning while trying to figure out what gets top billing, economic news or corporate earnings.

Amid the Fed’s rate easing cycles, there’s debate about the Fed’s next move after its super-sized 50 basis point cut in September. Some leaders like Comerica’s (CMA) chief banking officer, Peter Sefzik, have indicated that they want to see another 50 to 100 basis points cut. Krisiloff says the earnings calls from financial executives show “the gap between the confidence in financial markets versus the real economy.”

Krisiloff adds, “I think everybody is kind of waiting for more rate cuts here. I think even the Fed has just acknowledged that the rate cuts that they've had so far are just to bring us to a somewhat less restrictive stance. They still want to get to a neutral stance. But I think many actors in the economy are looking for a stimulative stance, and so the Fed's hand may really be pushed toward that stimulative stance over time.”

Consumer resilience is also a common theme of third quarter corporate earnings calls. “Resilient has been the most used word on earnings calls for the last two years now, as we've all been surprised that a recession really hasn't come through despite the higher interest rate environment. The consumer has just continued to spend.”

He continues, “What you're really seeing is a continuation of a bifurcation of the consumer where high- and moderate-income consumers are still spending a lot, and low-income consumers are really under pressure … I think what we're seeing right now in terms of consumer resilience is that employment is still carrying the day. As long as people are getting a steady paycheck and feel secure in their jobs, people are spending, and so that is powering the economy. The consumer is really the underpinning force of all of this." — Yahoo Finance

Down the Shore we are rooting through what has been thrown at us or washed up on the beach. The big, bountiful Fall tides are here so one never knows what one will find and no, there are no semiotic (had to look that one up) deductions being made here. Make it a great day.

Sticking to the game plan With five of the Mag 7 scheduled to report this week, I am reminded of what most post season, ...
28/10/2024

Sticking to the game plan

With five of the Mag 7 scheduled to report this week, I am reminded of what most post season, pregame locker room speeches sounded like. “This is it. This is what we worked for all year. So let’s go out there and continue to do what we I’d on practice because that’s what got us here, and remember, our record to date doesn’t mean anything, that’s all behind us. Right now, we need to focus on the task at hand, the team we are playing today, and go out there and win. You’ve got this!”

“Wall Street is bracing for a big week in markets that will mark the busiest week of third-quarter earnings reporting season and the final week before the Nov. 5 U.S. Presidential election. Five of the Magnificent Seven companies – Alphabet, Microsoft, Meta Platforms, Amazon and Apple – are scheduled to report third-quarter earnings.

"One thing we expect to see play out is these megacap tech names continuing to reinforce commitment to AI in tech spending broadly," Yung-Yu Ma chief investment officer at BMO Wealth Management, told CNBC. "I don't think there's going to be any backing away from that."

"If for some reason we don't get that – if a few of those tech companies reporting talk about say tapping on the brakes a little bit in some of these investments – the market would not take that well," he added. "So that's going to be somewhat impactful, for the market to actually hear that these companies are continuing their commitment to spending in this area, if not accelerating."

Traders are also watching for a slew of key economic data this week, including the September jobs report due Friday; the September personal consumption expenditures, or PCE, price index, expected Thursday; and a preliminary reading on third-quarter gross domestic product out on Wednesday.

Down the Shore we are trying to simplify the process by taking connecting the Xs and Os. Make it a great day.

27/10/2024

Ice Spice as LeeLoo from The Fifth Element Movie for Halloween.

The Week That Was — and there it was, gone!“The stock market's six-week streak of gains was interrupted last week, as ri...
27/10/2024

The Week That Was — and there it was, gone!

“The stock market's six-week streak of gains was interrupted last week, as rising bond yields started to attract investors' attention. Just over a month has passed since the Fed kicked off a new easing cycle, cutting its policy rate by a larger-than-typical half a percentage point. Yet, during that time, both 2- and 10-year Treasury yields have climbed, challenging the prevailing narrative. Could the rally in rates pose a serious threat to the stock market's momentum?

Key Takeaways
* Yields have moved higher since the Fed initiated its first rate cut and rose further last week, interrupting the stock market's streak of gains.
* Driving the rise in yields has been a combination of stronger-than-expected economic and inflation data leading to a shift in Fed expectations. Concerns over U.S. debt and the upcoming election are also adding to the recent bond volatility.
* Yields could temporarily overshoot, but we don't anticipate them rising substantially or exceeding the 2023 highs. The labor market and inflation will likely continue to cool next year, allowing the Fed to gradually remove some of its restriction. Also, a likely split Congress will limit new fiscal initiatives.
* Despite several crosscurrents, yields appear to be rising for the right reasons. The economy remains resilient with recession probabilities continuing to drop. With the underlying fundamentals favorable, we recommend taking advantage of any market turbulence to lean into opportunities in equities and fixed income.

The bottom line
Despite several crosscurrents, yields appear to be rising for the right reasons. The economy remains resilient with recession probabilities continuing to drop. Financial market signals are also consistent with a broadly positive backdrop. Since the Fed's initial rate cut, sector leadership has been balanced, with both growth and cyclical sectors outperforming defensives, while credit spreads have tightened to historically low levels.”
— Edward Jones

The market gets an A for effort. “The fishermen know that the sea is dangerous and the storm terrible, but they have nev...
25/10/2024

The market gets an A for effort.

“The fishermen know that the sea is dangerous and the storm terrible, but they have never found these dangers sufficient reason for remaining ashore.” Vincent Van Goth

The market is trying, not very successfully right now, to stop the bleeding of the past three days using mega tech stocks as their lifeline. The goal obviously being to “hold on to the lead.” Consumer confidence hitting a six month high definitely helped boost confidence and stoke pile on buyer fires.

“Fresh data out Thursday showed the US economy remains on track to grow at a solid pace through the end of 2024.

S&P Global's flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 54.4 in September, down from 54.6 in August. Economists had expected the index to tick down to 54.3.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the data shows the US economy's growth is chugging along to start the fourth quarter.

“October saw business activity continue to grow at an encouragingly solid pace, sustaining the economic upturn that has been recorded in the year to date into the fourth quarter," Williamson said in the release. "The October flash PMI is consistent with GDP growing at an annualized rate of around 2.5%."

Williamson added that sales are being stimulated by "competitive pricing," which led the selling price inflation for goods and services down to the lowest level since May 2020.

"These weaker price pressures are consistent with inflation running below the Fed’s 2% target," Williamson said.

This upbeat outlook falls in line with the strong projections market participants currently have for the third quarter gross domestic product (GDP) print. After a strong September jobs report and several better-than-expected retail sales prints, the economics team at Goldman Sachs is currently projecting the US economy grew at an annualized pace of 3.1% in the third quarter.”

Down the Shore (where the sunrise brought Goth’s work to mind) we, like the market, are trying desperately to hold onto the good string of weather we are currently enjoying. While we would like to roll around in the haystacks, or stare at starry skies, we also never forget the potential dangers of angry seas. Make it a great day.

The bloom is off the rose/daisyThe market started out with good intentions but has ended up getting sideways drinking jo...
24/10/2024

The bloom is off the rose/daisy

The market started out with good intentions but has ended up getting sideways drinking jobless claims, earnings, election woes, and continued geopolitical unrest. “Near term, pullbacks/profit-taking should be expected given the uncertainties around the upcoming US presidential election, geopolitical uncertainty, and the earnings parade,” said Craig Johnson at Piper Sandler. “No change to our 2024 year end S&P 500 price objective of 6,100.”

Paul Hickey, the co-founder of Bespoke Investment Group, said that he wouldn't read too much into the recent sell-off in stocks. He cautioned that the market might experience a slight pullback after November's U.S. presidential election, but that it would find its footing after the matter.

"You just have to put it in the perspective of what we've seen over the last six weeks. Part of this rally has been driven by the fact that earnings results — to start with, the big banks — were very strong, and their stock price reactions were also positive," he said on CNBC's "Closing Bell: Overtime" on Wednesday afternoon. "It's a rough day, but these days happen."

Down the Shore we are enjoying and trying desperately to hold on to a lengthy Indian summer. We live here for the seasons and so welcome the changes knowing that there is another season of wonder around the corner — hopefully later rather than sooner. Make it a great day.

Existing-Home Sales Slump to Lowest Level Since 2010. Why Buyers May Be Missing Out. 🙄 Sales of existing homes unexpecte...
23/10/2024

Existing-Home Sales Slump to Lowest Level Since 2010.
Why Buyers May Be Missing Out. 🙄

Sales of existing homes unexpectedly fell in September, to their slowest pace since late 2010. But buyers may want to consider this: one economist says it’s getting easier to buy a home.

Previously owned homes, which make up a majority of the housing market, were sold at a seasonally adjusted annual rate of 3.84 million, down 1% from a revised 3.88 million in August to its lowest monthly level since October 2010, according to National Association of Realtors data released Wednesday. Economists surveyed by FactSet had expected an increase to 3.9 million. Prices rose 3% from one year ago to $404,500.

“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months,” Lawrence Yun, the trade group’s chief economist, said in a statement. “But factors usually associated with higher home sales are developing.”

😇 Among the highlights: There were 1.39 million homes listed for sale at the end of the month, up 23% from one year prior, according to the data. Mortgage rates are lower than they were a year ago, and wages are growing faster than home prices, Yun said. “With wage growth now outpacing home price appreciation, housing affordability will improve,” he added.

Buyers could be postponing their searches for a few reasons, Lisa Sturtevant, chief economist of home listing network BrightMLS, wrote in a note about the data. “Falling mortgage rates in July and August were expected to bring more buyers into the market, but some home shoppers may be holding out for rates to fall further,” she said.

Election uncertainty also could be weighing on buyers, Yun noted. “Maybe people are just waiting to see what the results of the election will be before making a major decision like homebuying or home-selling,” he said. — Barrons

Does Three Days a Trend Make? Is that a light at the end of end of the tunnel, or an oncoming train?  🚂 The markets are ...
23/10/2024

Does Three Days a Trend Make?

Is that a light at the end of end of the tunnel,
or an oncoming train? 🚂

The markets are down for the third consecutive day on the strength of a global malaise in some of the world’s largest technology companies, data overload of corporate earnings, and yes, you guessed it, the Fed “band of brothers” roaming around the country suggesting that the rate cuts may not be as aggressive as what some financial specialist whispered to their client base. Star Child Nvidia was Dow 3% and that itch that one cannot reach to scratch, housing, is once again raising its ugly head. “Traders also parsed the latest economic data released before the Fed’s Beige Book. US sales of previously owned homes declined to an almost 14-year low in September as prospective buyers waited for a further decline in mortgage rates and more attractive asking prices.” — MarketWatch

Despite the fact that I have the “APolitical Blues,” I believe it bears referencing that 1) there is one in a few weeks, and 2) outside of candidate market predictions, which run the gamut, the run into the election will be felt in the markets. Andrew Brenner at NatAlliance Securities noted that Treasury yields continue to edge higher even in the face of a large Canadian cut in rates.

“In the US, it is about the election and potential sweep,” Brenner said. “That is what is being built into the rate structure, which is giving the vigilantes the green light. It will reverse, but it might take a severe employment number or a surprise in the election. But it won’t be today.”
The US dollar has strengthened further against its key trading partners amid rising Treasury yields, however, UBS’s Chief Investment Office maintains their “unattractive view” on the greenback.” — MarketWatch

Down the Shore we believe that there is light at the end of the tunnel, buy we are willing to take the chance that it might in fact be an oncoming train, se we are chillin’! Make it a great day.

To Buy or Not To Buy, That Is the QuestionHigh prices remain a challenge, despite lower mortgage rates — and we’re seein...
22/10/2024

To Buy or Not To Buy, That Is the Question

High prices remain a challenge, despite lower mortgage rates — and we’re seeing a “slow shift” away from a sellers’ market.

Nerdy takeaways
🏡 The median existing-home sales price hit $416,700 in August, following 14 months of year-over-year increases.

🏡 Mortgage rates dropped in anticipation of the Federal Reserve’s half percentage point cut to the federal funds rate on Sept. 18.

🏡 Houses for sale are receiving fewer offers and staying on the market longer compared to a year ago.

🏡 If you’re ready for homeownership and stick to your budget, it’s possible to buy in any market. Supply of homes for sale: Inventory slowly growing

We’re not in a buyer’s market quite yet. But after a few years of slim pickings, inventory is finally improving, according to the National Association of Realtors (NAR). In August, the number of homes for sale grew to a 4.2-month supply, meaning it would take a little more than four months at the current pace for all listed properties to sell. That’s a big jump from a year ago: In August 2023, the market had a 3.3-month supply of homes for sale.

“The rise in inventory – and, more technically, the accompanying months’ supply – implies home buyers are in a much-improved position to find the right home and at more favorable prices,” NAR Chief Economist Lawrence Yun said in a news release.

Home prices: Steep and still climbing
The national median price for existing homes sold in August was $416,700, up 3.1% from August 2023, according to the NAR, following 14 straight months of year-over-year price increases.

Sales of existing homes — properties that were owned and occupied before going on the market — dropped 2.5% from July to August to a seasonally adjusted annual rate of 3.86 million. Sales slumped 4.2% compared to August 2023.

While a look at last month’s home sales can provide a useful pulse check, the future health of the market takes other data points into account.
“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” Yun said in a news release. “The home-buying process, from the initial search to getting the house keys, typically takes several months.”

All four U.S. regions — Midwest, Northeast, South and West — saw year-over-year price increases in August. NerdWallet

It’s Enough to drive you Crazy, If you let itThe market tumbled out of bed and stumbled to the kitchen (down close to 20...
22/10/2024

It’s Enough to drive you Crazy, If you let it

The market tumbled out of bed and stumbled to the kitchen (down close to 200 as I write),
poured itself a cup of contrition,
yawned and stretched and is trying to right itself.
Jump in the shower and the Fed’s out hu***ng
Hinting “not so fast” now, ain’t that something
With folks like me on the job from nine to five.

“Following a relentless advance to all-time highs, equities dropped from nearly overbought levels. In another sign of how the market has been stretched, the S&P 500 has gone about 30 sessions without suffering back-to-back losses. While a month with no consecutive down days may not sound like much, the current streak ranks among the very best since 1928, according to data compiled by SentimenTrader.”

“Uncertainty about the future of Federal Reserve rate cuts has weighed on markets so far this week with the 10-year Treasury yield topping 4.20% early Tuesday after surging 11 basis points in the prior session. The 2-year yield climbed to 4.04% early Tuesday.

Rates have actually increased since the Fed cut by a half point a month ago. Part of that move can be attributed to improving economic data, but some of that increase is due to pessimism the Fed won't be as aggressive with rate cuts moving forward. Minneapolis Federal Reserve President Neel Kashkari hinted Monday the central bank may take a more modest approach from here.

Earnings season picks up this week with about one-fifth of the S&P 500 slated to report results. So far, about 14% of companies in the broad index have reported results, with more than 7 out of 10 topping earnings estimates, according to FactSet. — CNBC

Down the Shore, This morning’s sunrise make me think of what the first sunrise must have looked like. The first time the sun rose over the horizon unsure of what it would uncover. The opaque mist added to the sense of discovery, newness, wonder as the beauty unfolded. The light ever changing from tangerine through, orange, yellow, blue, daytime distinct from night reflected in a calm sea canvas waiting to be painted. Make it a great day.

America’s economy looks strong. So why is Wall Street worrying about renters and younger borrowers?The Kids Might Not be...
22/10/2024

America’s economy looks strong. So why is Wall Street worrying about renters and younger borrowers?

The Kids Might Not be Alright

That’s been a growing source of worry for Wall Street investors in consumer debt, even as the overall financial picture of American households looks healthy and the labor market continues to hold its ground in the face of historically high interest rates

A resilient, if still largely frozen, U.S. housing market has been a ballast for millions of homeowners with ultralow fixed-rate mortgages, as well as trillions of dollars in home equity available to spruce up their properties or to tap in case of an emergency

“The housing market has been performing extraordinarily well. It has been very resilient,” said Daniel Liesener, a senior analyst in fixed income at Columbia Threadneedle Investments

Renters, on the other hand, have faced surging rents since the pandemic that only recently have shown signs of ebbing.

While wages climbed in the wake of the pandemic, rents also increased 33.7%, according to Zillow . Zillow’s data suggest renters need to make almost $82,000 a year — an increase of 17.6% since 2021 — to “comfortably afford the typical U.S. rent.” The average U.S. salary at the start of this year was pegged at closer to $60,000.

More to the point, years of underbuilding of new homes has made it difficult for first-time buyers to get a foot in the door of homeownership, while the financial strain of renting has started spilling over into other parts of consumer credit.

Consumers have taken on a record amount of debt in the wake of the pandemic, yet serious signs of distress in the housing market have yet to emerge. The rate of seriously delinquent auto loans, credit-card debt and other consumer credit rose in the second quarter from a year before, but remained muted in the bulging mortgage category, according to the New York Federal Reserve — MarketWatch

You Gotta Know When to Hold “EmNot “every gambler knows the secret to survival”Investors this morning remind me of what ...
21/10/2024

You Gotta Know When to Hold “Em

Not “every gambler knows the secret to survival”

Investors this morning remind me of what it is like trying to figure out what to say to your team in the locker room at half time when they have a big lead. We all know that “prevent defense” and “playing not to lose” are fool’s games and YET, you do have that lead and if you take your foot off the gas, one goal leads to two and bam!, you’re in a nail biter. This is particularly true when your star (the markets) has been playing a blinder and even they could get tired in the second half. “The recent winning streak has investors optimistic equities still have further to run. Still, they are mindful that stretched valuations, ahead of the U.S. presidential election and amid rising geopolitical risks, could also mean further choppiness.

"If we're not really getting the kind of confirmation that the market is worth this elevated price, you know, then we could end up seeing a digestion of gains come fairly soon," said Sam Stovall, chief investment strategist at CFRA Research.

Down the Shore, like the market, we have adopted a defensive score on counter attacks strategy. We are not “parking the bus,” we are simply getting as many people behind the ball as possible, protecting the lead while keeping our opponents honest with well orchestrated counter attacks. Make it a great day.

“You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done.
- Kenny Roger’s

“Be Like Mike” 🏀 The market is trying to “Be Like Mike” or at least achieve half of MJ’s (Michael Jordan) double three p...
21/10/2024

“Be Like Mike” 🏀

The market is trying to “Be Like Mike” or at least achieve half of MJ’s (Michael Jordan) double three peat.

Edward Jones
🏀 The stock market continues its impressive performance in 2024, which if maintained, would give it a second consecutive year with a return above 20%, something that has occurred in only five periods over the last 75 years.

🏀 While only one of those periods saw that level of return again the following year, history does show that the market often continued to move higher, just not at that same pace.

🏀 Current conditions are hardly devoid of risks, but the present setup of a growing economy, more friendly Fed policy, and an uptrend in corporate profits is, in our view, supportive for further gains ahead, just perhaps not as smooth or as strong as we've enjoyed of late.

The stock market has been on quite a run, rallying more than 12% just since early-August and extending its year-to-date return to nearly 23%.* If the S&P 500 holds on to this gain for the remainder of 2024, this will be the second consecutive year with a return of 20% or more.

While we recognize we just brought a jinx into play with that statement, the strength of this market over the last two years has not been by luck. Instead, it's been powered by the "big three" fundamentals: a growing economy, a more friendly interest-rate policy outlook, and rising corporate profits.

So while there is plenty of year left, and there's no assurance that this year-to-date gain will be upheld, let's presume for a second that we didn't jinx it, and take a look back at similar market periods to see what they might tell us about the potential for this 20% sequel to turn into a three-peat. — Edward Jones

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