WEEKLY MARKET RECAP – JULY 12, 2024
The Dow rose nearly 2%, outperforming the fractional gains of the S&P 500 and the NASDAQ, and came just shy of joining its peers in record territory. This result left the Dow 3 points below the record set two months earlier, when it closed above 40,000 points for the first time, finishing at 40,003.6.
A better-than-expected inflation report on Thursday raised hopes for potential interest-rate cuts in the coming months. The Consumer Price Index fell 0.1% from May to June—the first month-to-month drop since May 2020—and annual inflation decreased to 3.0% from 3.3% the previous month. However, a separate report on Friday showed a larger-than-expected rise in wholesale prices.
A small-cap benchmark posted a 6.0% total return and reached its highest level since January 2022, with much of the weekly gain occurring after Thursday morning’s inflation report. Despite the surge, the Russell 2000 Index lagged behind its large-cap peer on a year-to-date basis, 6.8% to 17.5%.
Three major U.S. banks reported mixed second-quarter results on Friday, with two institutions showing year-over-year earnings declines. Analysts were forecasting an overall earnings increase of 8.9% across the S&P 500 for the second quarter compared to the previous year, potentially marking the strongest quarterly growth rate in over two years, according to FactSet.
A U.S. large-cap value stock index outperformed its growth counterpart for the week, narrowing the growth style’s year-to-date outperformance. The value index posted a 2.8% total return for the week, while the growth index slipped 0.4%.
Government bond yields dropped as investors interpreted Thursday’s inflation report as a signal that interest-rate cuts might come sooner rather than later. The yield of the 10-year U.S. Treasury bond fell to 4.18% at Friday’s close—the lowest in nearly four months—along with declines in the yields of 2- and 30-year notes.
An indicator tracking U.S. consumer sentiment fell to its lowest level in eight months. Friday’s preliminary reading from the University of Michigan’s Consumer Sentiment Index was below most economists’ expectations, though the survey did find an improvement in consumers’ inflation expectations for the second consecutive month.
The U.S. retail sales data scheduled for release on Tuesday could indicate whether the recent sales slump extended into June. In May, sales rose 0.1% month-to-month after a 0.2% decline in April, both figures down sharply from gains in March and February.
Major U.S. Economic Reports
| Report | Period | Actual | Previous |
| Consumer credit | May | $11.4B | $6.4B |
| NFIB optimism index | June | 91.5 | 90.5 |
| Wholesale inventories | May | 0.6% | 0.2% |
| Initial jobless claims | July 6 | 222,000 | 239,000 |
| Consumer price index | June | -0.1% | 0.0% |
| CPI year over year | 3.0% | 3.3% | |
| Core CPI | June | 0.1% | 0.2% |
| Core CPI year over year | 3.3% | 3.4% | |
| Monthly U.S. federal budget | June | -$66B | -$228B |
| Producer price index | June | 0.2% | 0.0% |
| PPI year over year | 2.6% | 2.4% | |
| Core PPI | June | 0.0% | 0.2% |
| Core PPI year over year | 3.1% | 3.3% | |
| Consumer sentiment (prelim) | July | 66.0 | 68.2 |
Closing Prices for the Week
| Contract | Close |
|---|---|
| Dow Jones Industrials Average | 40,000.90 |
| Nasdaq Composite | 18,398.45 |
| S&P 500 Index | 5,615.35 |
| CBOE Volatility Index | 12.46 |
| S&P GSCI | 572.38 |
| U.S. Dollar Index | 104.093 |
| 10-Year T-Note (Sep ’24) | 111-060 |
| Crude Oil WTI (Aug ’24) | 82.21 |
| Natural Gas (Sep ’24) | 2.331 |
| Gold (Aug ’24) | 2,420.7 |
| Silver (Sep ’24) | 31.162 |
| Corn (Dec ’24) | 414-6 |
| Wheat (Sep ’24) | 550-6 |
| Soybean (Nov ’24) | 1065-2 |
| Coffee (Sep ’24) | 248.75 |
| Sugar #11 (Oct ’24) | 19.20 |
| Cocoa (Sep ’24) | 8,321 |
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<p>The post Weekly Market Recap – July 12, 2024 first appeared on World Cup Trading Championships.</p>