Morning Market Preview for September 6, 2024

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Arena Investor is modern planning and investing built for the busy, hardworking professionals who know their money needs more attention but don't have the time, or simply want better work-life balance.

Good morning, Heroes!

Here’s your Morning Market Preview for September 27th, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports

• Many economic reports again today. Let’s dive in:
  
  
• At 8:30am Personal Income and Personal Spending reports drop, previously 0.3% and 0.5%, respectively, with Personal Income expected to increase to 0.4% and Personal Spending to decrease to 0.3%.
  
  
• Also at 8:30am the PCE Index reports, previously 0.2%, expected to be down to 0.1%.
  
  
• At 8:30 the PCE Year-Over-Year reports as well, previously 2.6%, expected to be up to 2.7%.
  
  
• Continuing with the 8:30am reports, Wholesale Inventories reports, previously 0.2%, with no expectations set.
  
  
• Along those lines, Retail Inventories also reports, previous 0.8%, with no expectations set.
  
  
• At 10:00am, Consumer Sentiment reports, previously 69.0, expecting a small improvement to 69.3.

Key  Earnings Reports & Events Today

• No key Earnings Reports for Friday.
  
  
• Boeing’s strike continues, and the Union expects talks to resume today. The strike began on September 13th. 

The Fed

• “Conversations with Governor Bowman” begins at 1:15pm from Birmingham, Alabama. 

Stocks

Year-to-Date Performance:

• Up Most: Tech is up once again, now up 28.99% this year. Utilities passes Communications as second-best on the year, up 26.55%.
  
  
• Down Most: Important to know, no sectors are negative on the year. The smallest gain has been in Energy, down 2% yesterday, up overall to 4.74% this year. Second-to-last is now Materials, up 11.36%.

5 Day Moving Average, Percent of Large Caps above their 5 day average:

• Up Most: Materials are up most at 93%. Communications is second now at 82%.
  
  

• Down Most: Real Estate has had a bad 5 days, down now to 13%. Energy is down second-most, now at 18%. 

Crypto

• Bitcoin: Bitcoin up significantly in the last 24 hours, now about $65k, which puts it at a staggering 50.2% gain on the year.
  
  
• Ethereum: Ethereum up significantly in the last day too, now over $2,600, which means an 14.5% gain on the year.
  
  
• Top Gainers Recently: Shiba Inu zorched upwards an astounding 20.9% in the last day.
  
  
• Important to note: Crypto markets are always open and prices change constantly.

Bonds

• 2-Year Treasury:  Yields are up, now at 3.627%.
  
  
• 10-Year Treasury: Up a smidge again to 3.796%, but overall it’s been coming down this year too.
  
  
• The “spread” is opening, and the yield curve is no longer inverted, having un-inverted in late August, 2024.

Gold

• Price: Gold prices remain elevated, now up to $2670, and it’s up 29% on the year.

Real Estate

• 30-Year Fixed Mortgage Rate: Up just a bit, now to 6.21%. The mortgage rate has dropped about 6.9% this year.

Geopolitical Aspects

• Market sentiment appears bullish, with equities gaining from Chinese stimulus and positive earnings, notably from MU.
  
  
• Investors are keenly watching for the PCE data, expecting a decline in headline PCE to 2.3% YoY, signaling potential dovish signals for monetary policy.
  
  
• Treasury Secretary Yellen's comments on banking liquidity and the Fed's stance provide a backdrop of stability amidst market volatility dynamics.

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    We’re the Guide.

P.S.

Continue reading, if you would enjoy some simple explanations of key concepts to level up your financial education

Each of these elements interacts, creating the dynamic we call 'the market'.

Understanding these aspects of the investing arena can help investors in making informed investment decisions.

You’re the Hero.
    We’re the Guide.

• PCE (Personal Consumption Expenditures Price Index): A key measure of U.S. inflation, reflecting changes in the prices paid by consumers for goods and services.
• "The Yield Spread" or just “The Spread”: The difference between yields on differing debt instruments, typically the 2-year and the 10-year Treasuries, often used to predict economic trends or assess risk.
• Initial Jobless Claims: The report measures the number of people who filed for unemployment benefits for the first time during the past week, indicating labor market strength or weakness.
• Consumer Confidence: The Consumer Confidence report measures how optimistic consumers are about the economy's short-term future, influencing spending and investment decisions. It's based on surveys about income, business, and employment conditions.
• PMI (Purchasing Managers' Index): This is like a health check for businesses. A number above 50 means more growth, below 50 indicates contraction. It's crucial because it shows if companies are buying more stuff, which suggests they're confident about future sales.
• Economic Reports: Data like jobless claims help predict economic health. For instance, rising claims might suggest economic slowdown.
• Jobless Claims: These are weekly reports that show the number of people filing for unemployment benefits. Higher numbers can indicate a weakening labor market.
• Housing Starts: This measures the number of new residential construction projects and is a key indicator of real estate market health.
• The University of Michigan's Consumer Sentiment Index measures consumer confidence through surveys, reflecting optimism or pessimism about personal finances and business conditions.
• Federal Reserve Rate Decisions: The Fed adjusts interest rates to either stimulate the economy (by lowering rates) or control inflation (by raising rates). Rate cuts can make borrowing cheaper, while rate hikes aim to curb inflation.
• Treasury Yields: The return on U.S. government bonds, often used as a measure of investor sentiment about future inflation and economic growth.
• Stock Sectors: Different sectors thrive in different economic conditions. Tech might boom during innovation, while energy could struggle with green shifts.
• Bonds and Yields: Bonds are safer than stocks but yield reflects risk or inflation expectations. Higher yields could mean investors demand more return.
• Cryptocurrency: Digital currencies like Bitcoin and Ethereum have been volatile but offer significant returns in 2024.
• Gold: A traditional safe-haven investment that often rises during times of uncertainty or when inflation is high.
• Real Estate: Influenced by rates, economic health, and demographic trends. Lower rates can inflate home prices due to increased buying power.
• Mortgage Rates: Higher rates make borrowing more expensive, which can cool down housing demand and affect real estate prices.
• 1 Basis Point (BPS) equals 0.01%. It’s easier to say “5 bips” than it is to say “zero point zero five percent.”

Data Sources

Key Economic Reports: https://www.marketwatch.com/economy-politics/calendarConsumer Surveys: https://data.sca.isr.umich.edu/reports.phpKey Earnings Reports: https://www.earningswhispers.com/calendar/Key Events: https://x.com/i/grok and fact-checkingThe Fed: https://www.federalreserve.gov/newsevents.htmStocks, Year-to-date Performance: https://digital.fidelity.com/prgw/digital/research/sectorStocks, 5 Day Moving Averages: https://www.barchart.com/stocks/market-performance#google_vignetteCrypto, Bitcoin: https://www.cnbc.com/quotes/BTC.CM=Crypto, Ethereum: https://www.cnbc.com/quotes/ETH.CM=Crypto, Top Gainers: https://www.cnbc.com/cryptocurrency/Bonds, 2 Year: https://www.cnbc.com/quotes/US2YBonds, 10 Year: https://www.cnbc.com/quotes/US10YGold: https://www.cnbc.com/quotes/XAU=US 30-Year Fixed Mortgage Rate: https://www.cnbc.com/quotes/US30YFRMGeopolitical Aspects: https://x.com/i/grok, https://chatgpt.com, and fact-checkingSimple Explanations: https://x.com/i/grok, https://chatgpt.com, and fact-checkingThe article itself is written by Arena Investor humans, not AIThe article audio is generated by https://elevenlabs.ioThe article images are generated by https://chatgpt.com using DALL-E

Arena Investor is modern planning and investing built for the busy, hardworking professionals who know their money needs more attention but don't have the time, or simply want better work-life balance

Good morning, Heroes!

Here’s your Morning Market Preview for September 16th, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports

• No reports to mention for Monday.

Key Events & Earnings Reports Today

• A handful of lesser-known companies report on Monday: Hide Tide Inc, RF Industries, Vince Holding Corp, and Ocean Power Technologies. Likely, none of these reports will move the market.

The Fed

• All eyes are on the Fed. On the 17th and 18th the key members meet to decide on a rate cut. The consensus had been that the Fed would cut rate by a quarter percent, but a lot of energy has formed around a half percent cut with the charge led by former New York Fed President William Dudley, saying “I think there’s a strong case for 50.”

Stocks

Year-to-Date Performance:

• Up Most: Tech has taken over the top spot with a strong week last week, now up 26.21%. Second is Utilities, now up 23.18%.
  
  
• Down Most: Energy is down the most, but is still barely up on the year overall at 1.83%. Down second-most is Materials, up 7.95% on the year.

5 Day Moving Average: This is the percent of Large Cap stocks above their 5 day average

• Up Most: Utilities and Consumer Discretionary are now up a whopping to 97% and 96% of their Large Cap above their 5 day average, respectively. Tech and Materials are tied for second best over the last 5 days with 93% of their Large Caps above their 5 day averages.
  
  

• Down Most: Energy is down most with 59% of its Large Cap stocks above its 5 day average. And Consumer Staples was second to last, although it had 68% of its Large Cap stocks above their 5 day averages.
  
  
• Overall, it was a great week for these sectors, as we get a new week started.

Crypto

• Bitcoin: Up to about $59,826, up a massive 42.24% this year.
  
  
• Ethereum: Opening at about $2,409, and staying positive at 2.47% this year.
  
  
• Top Gainers Recently: Litecoin left the rest of the field in the dust recently, up 5.74% as of this report.

Bonds

• 2-Year Treasury Yield:  At 3.603%, it has continued its yield decline this year.
  
  
• 10-Year Treasury Yield: At 3.649%, it also continues its yield decline this year.

Gold

• Price: Gold has had an amazing year, up 24.92%, now at about $2,576.

Real Estate

• 30-Year Fixed Mortgage Rate: Down just a bit, now to 6.14%. The mortgage rate has dropped about 7.95% this year.

Geopolitical Aspects

• Geopolitical tensions, particularly in the Middle East and between major powers like the U.S. and China, influence markets significantly. Escalations or de-escalations in these regions can lead to immediate market volatility, affecting oil prices, stock markets, and investor sentiment. The potential for broader conflict or trade disruptions adds uncertainty, with markets often reacting swiftly to geopolitical news.

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.

P.S. 

Some Simple Explanations of Key Concepts to Level Up Your Financial Education

Stock Market Sectors: Stocks are divided into sectors like technology, health care, or energy. Each sector performs differently based on economic conditions, policy changes, or technological advancements. For instance, tech stocks might thrive in a high-growth environment, while energy stocks could respond to oil price fluctuations.

Bonds and Treasury Yields: When you buy a bond, you're lending money to the issuer (like the government) in exchange for interest over time. The yield is this interest rate. Higher yields can mean higher risk or inflation expectations, affecting all asset classes, including stocks and real estate.

Cryptocurrencies: These are digital or virtual currencies not backed by any government or physical asset. Their value can soar or plummet rapidly due to speculation, regulatory news, or technological developments.

Gold: Often seen as insurance against economic downturns or inflation. When economies are uncertain, gold tends to rise in value as investors seek safe investments.

Real Estate: Mortgage rates directly impact housing affordability. Lower rates can lead to a housing boom, but if rates rise, demand can fall, affecting home prices.

Understanding these aspects of the investing arena can help investors in making informed investment decisions.

You’re the Hero.
    We’re the Guide.

Each and every day the market overreacts to news

A report comes out and a stock drops 5%. Another report comes out and a different stock drops 8%.

But is that company reported on now a different company than it was before the report?

That’s the question we ask ourselves when considering buying the day’s hardest hit stocks. If the answer is no, then likely the market has overreacted and the stock is now offered at a discount. One of our strategies is to buy stocks in this manner, especially if the stock is already owned (and therefore liked).

This is also an opportunity to start new positions (buy your first shares) of a company too

We don’t consider any and all stocks that have a bad day though. We pre-screen stocks, get to know and understand them well, then add them to a watchlist if we like them. From there we watch and see which companies in the watchlist are unjustly punished with news. When it makes sense, we start or add to the position. Over time this builds a quality portfolio of stocks purchased at a discount.

This can be done with value or growth stocks. If done with growth stocks the overall effect is that one is buying growth stocks at discounted (value) prices. Frankly, it’s proven to be a powerful combination over time, and grows more powerful the longer the strategy is used. As the growth stocks grow, the value-priced buys add up, and the portfolio develops.

This is also a nice strategy to use for those that like DCA (Dollar Cost Averaging). You can buy the stock that was most unfairly punished that week with the DCA money you've contributed to your brokerage account.

Capitalize on an emotional marketplace by being prepared and emotionally poised yourself. 

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.