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U.S. stock markets closed higher on Monday continuing the rally after early August devastation. Market participants are waiting for the Fed Chairman’s lecture later this week in a key event of the central bank. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 236.77 points to close at 40,896.53. Notably, 24 components of the 30-stock index ended in positive territory while 6 in negative zone. The tech-heavy Nasdaq Composite finished at 17,876.77, gaining 1.4% or 245.05 points due to strong performance by technology giants. The tech-laden index posted an eight-day winning streak for the first time since November 2023.
The S&P 500 increased 1% to finish at 5,608.25. Wall Street’s key benchmark registered an eight-day winning streak for the first time since November 2023. The major gainer of the index was EQT Corp. (EQT - Free Report) . The stock price of this oil and natural gas exploration company surged 4.9%. EQT currently carries a Zacks Ran#3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
All 11 broad sectors of the broad-market index ended in positive territory. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) gained 1.7%, 1.2% and 1.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 1% to 14.65. A total of 10.30 billion shares were traded on Monday, lower than the last 20-session average of 12.24 billion. Advancers outnumbered decliners on the NYSE by a 3.54-to-1 ratio. On Nasdaq, a 2.71-to-1 ratio favored advancing issues.
All Eyes on Jackson Hole Symposium
Market participants are eagerly waiting for the Fed’s upcoming annual Jackson Hole Economic Policy Symposium to be started from Aug 24. On Friday, the Fed Chairman Jerome Powell will deliver his speech. Investors will keenly analyze that lecture to find out clues regarding the central bank’s future course regarding the interest rate movement.
At present, the CME FedWatch shows a 100% probability that the Fed will reduce the benchmark lending rate by 25 basis points in September. If this materializes, it will be the first rate cut in more than four years. Notably, the Fed fund rate is currently in the range of 5.25-5.5%, its 23-year high level. The interest rate derivative tool also shows nearly 61% chance that the Fed will cut interest rate by another 25 basis points in November.
Recession Fears Evaporates
In last couple of weeks Wall Street witnessed several strong economic data. Solid services sector PMI for July, an unexpected rise in retail and core retail sales in July, two consecutive lower-than-expected weekly jobless claims and several measures of dwindling inflation rate boosted market participants’ confidence on the Fed’s much-hyped “soft landing” theory.
Economic Data
The Conference Board reported that the Leading Economic Index (LEI) for the U.S. fell by 0.6% in July 2024 following a decline of 0.2% in June. The consensus estimate was for a decline of 0.4%. However, over the six-month period ending July 2024, the LEI fell by 2.1%, a smaller rate of decline than its 3.1% decline over the six-month period between July 2023 and January 2024.
A New York Fed survey released Monday showed tepid data for July regarding labor activity, confidence and satisfaction compared with March. The thrice-yearly survey reflected growing concern about job security. Those who were employed at the time of the last survey in March, 88% still had jobs, the lowest level since 2014. Similarly, those who expected to become unemployed rose to 4.4%, a 0.5% increase from a year ago, reflecting a historical high.
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Stock Market News for Aug 20, 2024
U.S. stock markets closed higher on Monday continuing the rally after early August devastation. Market participants are waiting for the Fed Chairman’s lecture later this week in a key event of the central bank. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 236.77 points to close at 40,896.53. Notably, 24 components of the 30-stock index ended in positive territory while 6 in negative zone. The tech-heavy Nasdaq Composite finished at 17,876.77, gaining 1.4% or 245.05 points due to strong performance by technology giants. The tech-laden index posted an eight-day winning streak for the first time since November 2023.
The S&P 500 increased 1% to finish at 5,608.25. Wall Street’s key benchmark registered an eight-day winning streak for the first time since November 2023. The major gainer of the index was EQT Corp. (EQT - Free Report) . The stock price of this oil and natural gas exploration company surged 4.9%. EQT currently carries a Zacks Ran#3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
All 11 broad sectors of the broad-market index ended in positive territory. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) gained 1.7%, 1.2% and 1.1%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was down 1% to 14.65. A total of 10.30 billion shares were traded on Monday, lower than the last 20-session average of 12.24 billion. Advancers outnumbered decliners on the NYSE by a 3.54-to-1 ratio. On Nasdaq, a 2.71-to-1 ratio favored advancing issues.
All Eyes on Jackson Hole Symposium
Market participants are eagerly waiting for the Fed’s upcoming annual Jackson Hole Economic Policy Symposium to be started from Aug 24. On Friday, the Fed Chairman Jerome Powell will deliver his speech. Investors will keenly analyze that lecture to find out clues regarding the central bank’s future course regarding the interest rate movement.
At present, the CME FedWatch shows a 100% probability that the Fed will reduce the benchmark lending rate by 25 basis points in September. If this materializes, it will be the first rate cut in more than four years. Notably, the Fed fund rate is currently in the range of 5.25-5.5%, its 23-year high level. The interest rate derivative tool also shows nearly 61% chance that the Fed will cut interest rate by another 25 basis points in November.
Recession Fears Evaporates
In last couple of weeks Wall Street witnessed several strong economic data. Solid services sector PMI for July, an unexpected rise in retail and core retail sales in July, two consecutive lower-than-expected weekly jobless claims and several measures of dwindling inflation rate boosted market participants’ confidence on the Fed’s much-hyped “soft landing” theory.
Economic Data
The Conference Board reported that the Leading Economic Index (LEI) for the U.S. fell by 0.6% in July 2024 following a decline of 0.2% in June. The consensus estimate was for a decline of 0.4%. However, over the six-month period ending July 2024, the LEI fell by 2.1%, a smaller rate of decline than its 3.1% decline over the six-month period between July 2023 and January 2024.
A New York Fed survey released Monday showed tepid data for July regarding labor activity, confidence and satisfaction compared with March. The thrice-yearly survey reflected growing concern about job security. Those who were employed at the time of the last survey in March, 88% still had jobs, the lowest level since 2014. Similarly, those who expected to become unemployed rose to 4.4%, a 0.5% increase from a year ago, reflecting a historical high.