2024 Weekly 40
Infinity9 Investment Group
Build wealth via the highest performing asset class: U.S. private equity real estate.
1. Market Resilience: A Week of Steady Gains
Last week's financial markets showed remarkable stability and growth. The S&P 500 and Dow both added 0.6% to their record-high levels, while the NASDAQ rose 1.0%, ending 2.8% below its record set two months ago. In Europe, stocks climbed more than 2%, reaching a new record high.
Key Takeaway:?Despite ongoing global economic challenges, markets demonstrated significant resilience and positive momentum.
2. Inflation Continues to Ease
Inflation pressures are showing signs of gradual but steady easing. The PCE Index rose at an annual rate of 2.2% in August, the lowest since February 2021. Meanwhile, the Core PCE Index (excluding energy and food) increased by 2.7%, matching expectations.
Key Takeaway:?The easing inflation trend could potentially influence future Fed policy decisions.
3. China's Economic Stimulus
The People's Bank of China has announced several measures to stimulate economic growth. These include plans to lower borrowing costs, inject more funds into the economy, and ease households' mortgage repayment burdens.
Key Takeaway:?China is taking significant steps to accelerate growth in the world's second-largest economy, which could have global ripple effects.
4. U.S. Economic Indicators Remain Strong
The U.S. economy continues to show strength across multiple indicators. Q2 GDP growth was confirmed at a 3.0% annualized rate, while weekly unemployment claims fell to 218,000, a four-month low. Furthermore, the Atlanta Fed's Q3 GDP estimate currently stands at an impressive 3.1%.
Key Takeaway:?The U.S. economy continues to show strength across multiple indicators, defying expectations of a slowdown.
5. Rising Consumer Sentiment
Consumer confidence is on an upward trend. The University of Michigan's Consumer Sentiment Index rose to 70.1 in September, up from 67.9 in August.
Key Takeaway:?Improving consumer confidence could potentially support continued economic growth.
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6. Oil Prices Decline
In the energy sector, U.S. crude oil prices dropped nearly 4% for the week to less than $69 per barrel. This represents a significant decrease from the recent high of nearly $84 per barrel in early July.
Key Takeaway:?Falling oil prices could help further ease inflationary pressures.
7. Corporate Earnings Disparity
A significant gap in profitability between large-cap and small-cap companies has emerged. While only 6% of S&P 500 companies have negative earnings, this figure rises to 14% for mid-cap index companies and a concerning 42% for Russell 2000 companies.
Key Takeaway:?The earnings disparity potentially indicates economic stress for smaller businesses.
8. U.S. Stock Market Dominance
The U.S. continues to strengthen its position in global financial markets. In 2009, the U.S. stock market represented 30% of the global stock market cap. Today, that figure has grown to almost 50%.
Key Takeaway:?The U.S. is cementing its dominance in global financial markets.
9. Demographic Trends
Major economies are experiencing diverging demographic trends. The USA maintains positive net immigration and positive but declining natural population growth. Germany faces negative natural population growth but positive net immigration. Japan grapples with very negative population growth and only modest net immigration.
Key Takeaway:?These diverging demographic trends could have long-term implications for economic growth and policy decisions in these major economies.
Next week, we'll be closely watching the September U.S. jobs report and any potential updates on global economic policies. Stay tuned!