September 19th Market Overview

September 19th Market Overview (no fluff)

Author

J.L. Bernstein
September 19, 2024

In partnership with

Happy Thursday, everyone.

The bulls are happy today, I’m happy because my largest position (PYPL) is up 5.5%. The MKT is cooking. I think it’s to early to say we are in a risk on environment but we are close to that. I would love to see some healthy consolidation next week.

Lets dig in…

Executive Summary

  • Dow Jones Industrial Average passes 42,000, marking a historic first

  • S&P 500 breaks above 5,700, setting a new all-time high

  • Tech stocks lead the rally following the Fed’s unexpected 50 basis point rate cut

  • Jobless claims drop signals resilient labor market, supporting economic optimism

Market Overview

We’re witnessing a significant market rally in response to the Federal Reserve’s rate cut. The Dow advanced 512 points (1.2%), breaching 42,000. The S&P 500 rose 1.7%, breaking above 5,700, while the Nasdaq Composite surged 2.6%.

This broad-based rally reflects renewed investor confidence in a more favorable economic environment.

Key Market Drivers

  1. Federal Reserve’s rate cut: The Fed slashed its overnight lending rate to 4.75%-5% from 5.25%-5.5%, marking the first reduction in four years.

  2. Strong labor market: Weekly jobless claims fell by 12,000 to 219,000, below estimates, supporting the soft landing narrative.

  3. Tech sector surge: Major tech players are experiencing sharp increases, driving overall market gains.

Stock Spotlight

  1. $NVDA: Surged over 5% as chip stocks rallied post-Fed decision.

  2. $AMD: Jumped more than 7%, benefiting from renewed interest in semiconductor stocks.

  3. $TSLA: Shares climbed around 7%, riding the tech sector wave.

  4. $SKX: Skechers USA plummeted nearly 9% on concerns over China business performance.

  5. $DRI: Darden Restaurants soared 11% after announcing an Uber partnership, despite weak earnings.

Other Magnificent 7 Updates

  • $AAPL: Up more than 4% in the tech-led rally.

  • $META: Gained over 3%, trading at all-time high levels since its IPO.

  • $GOOGL: Advanced 2.2% amid broader tech enthusiasm.

Other Notable Company News

  • $PGNY: Progyny tumbled 30% after losing a significant client, potentially impacting revenue.

  • $SLB: Announced collaboration with Nvidia on AI solutions for the energy sector, stock up 2%.

  • $DASH: DoorDash received an upgrade to buy from BTIG, citing strong growth prospects.

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

+1.95%

Consumer Staples

XLP

-0.56%

Energy

XLE

+1.57%

Financials

XLF

+1.14%

Healthcare

XLV

+0.25%

Industrials

XLI

+1.69%

Materials

XLB

+1.53%

Real Estate

XLRE

-0.21%

Technology

XLK

+3.24%

Communication Services

XLC

+2.18%

Utilities

XLU

-0.63%

Bond Market

Expectations of a prolonged lower interest rate environment are impacting yields across various maturities.

In a lower-rate environment, long-term bonds benefit the most because they lock in higher yields over time.

Policy Watch

The Fed’s rate cut marks a significant policy shift aimed at easing financial conditions. The Bank of England’s decision to hold rates steady contrasts with the Fed’s approach, highlighting diverging global monetary policies.

P.S. Any “clicks” to our sponsor allows me to drink good coffee in the morning. Please consider clicking through and checking out sponsors even if you don’t think you want to buy or subscribe from them :-)

- JB

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Note: This newsletter is intended for informational purposes only.