Major Indexes Close Lower as Second Quarter Ends.
On Friday, the major indexes (^GSPC, ^DJI, ^IXIC) closed lower, marking the end of the year’s second quarter. Both the S&P 500 and Nasdaq Composite had seen gains in seven of the previous nine months, with the Nasdaq also closing higher in nine of the past ten weeks. JPMorgan Private Bank released its 2024 mid-year outlook, titled “A Strong Economy in a Fragile World.” Joining the show, Ed Clissold, chief US strategist at Ned Davis Research, shared insights into recent economic data, takeaways from the first half of the year, and market predictions moving forward. Additionally, a J.D. Power study found significant issues troubling battery electric vehicles, with 266 problems per 100 EVs compared to 180 per 100 internal combustion engine vehicles.
Video Transcript Summary
The market closed down on Wall Street. Jared provided an update on the day’s action. The Dow was down by about 41 points (1/10 of 1%) for the week, with the S&P 500 dropping 4/10 of 1% and the Nasdaq down 7/10 of 1%. As the second quarter and first half of the year ended, traders adjusted their positions.
Yields remained unchanged despite inflation data aligning with estimates, with the 10-year yield at 4.34%. Jared mentioned the NASDAQ 100, noting a lot of red in mega caps. Energy and communication services were the only sectors in the green, while utilities, materials, staples, and tech saw declines of 1% or more. Regional banks and solar energy stocks were among the best performers, while Bitcoin and cannabis stocks experienced declines.
Ed Clissold discussed the market’s outlook, noting solid earnings growth and a low chance of recession. He mentioned the potential for a small correction but emphasized a generally positive outlook for the second half of the year. Valuations were slightly elevated but not a major concern unless earnings growth declines. Clissold also highlighted the relative valuations between stocks and bonds.
On the political front, Alex Saunders from Citi Research discussed the impact of the recent presidential debate, noting that market reactions were mild. He emphasized that the current focus is on the rates market and the potential for a split Congress, which would be bond market-friendly.
In the automotive sector, JD Power’s latest initial quality survey revealed significant issues with battery electric vehicles, with Tesla’s score dropping due to changes in the Model Y and Model 3.
Jobs Report
The June Jobs report is due on Friday, with expectations of a slight decline in non-farm payrolls and hourly wages, while unemployment is expected to hold steady.
Fed Chair Jerome Powell’s Speech
Powell will speak at the European Central Bank Forum in Portugal on Tuesday.
FOMC Meeting Minutes
Minutes from the June FOMC meeting will be released on Wednesday.
Constellation Brands Earnings
Constellation Brands will report earnings on Wednesday, with a focus on the performance of its beer business.
