The S&P 500 index fell on Friday but posted its third consecutive weekly gain after three record closes last week. For the week, the S&P 500 rose just over 0.6%; the Dow Jones Industrial Average, which closed at another record high on Friday, gained nearly 0.6%; the Nasdaq advanced almost 1%, but remained a few percentage points below the historic closing high of July 10th. Friday brought further confirmation that inflation remains on track. While stocks didn’t react much, the 10-year Treasury yield fell. This is important because although the shorter segment of the bond market yield curve has largely declined since the Federal Reserve cut the interest rate 50 basis points the previous week, the longer segment has actually been rising. , which doesn’t do much to lower mortgage rates. August numbers from the Fed’s favorite inflation gauge, released before Wall Street opened on Friday, were subdued. The core personal consumption expenditures (PCE) price index rose 2.2% year over year – below estimates and the smallest increase since February 2021. Core PCE, which excludes volatile food and energy prices, rose 2.7% year on year – in line with expectations. The Fed’s inflation rate target is 2%, so we are getting closer. With no surprises on inflation preceded by fewer weekly jobless claims than expected and a solid final reading on second-quarter economic growth on Thursday, investors felt comfortable exiting the week. past. Given that the market expects further Fed rate cuts of 75 basis points by the end of the year, moderating inflation and a resilient economy continued to be a good backdrop for owning stocks. The rally in stocks last week exacerbated the market’s overbought condition. The S&P Short Range Oscillator on Friday remained overbought for the ninth consecutive session, but only slightly above threshold. Our discipline forces us to consider shorting stocks when the market is overbought. On Friday, we reduced our position in GE Healthcare – and on Wednesday, we made small sales in Meta Platforms, Alphabet and Danaher. Costco was the only name in our club to report profits last week. After Thursday’s close, the retailer posted quarterly earnings beats and a small revenue loss. The numbers were good, but they still offered plenty of reminders about why Costco investors should stick around. We raised our price target from $875 to $950 per share, but maintained our Hold Rating for a 2 Retracement in case the next move is lower before moving higher. Next week, we’ll get quarterly results from the Constellation Brands club name and September government employment report. Jobs, Jobs, Jobs Next Friday’s big update on the state of the labor market is the main market event and could have big implications for Wall Street and the path to Fed rate cuts. The data will be especially scrutinized given that this is the first reading we have obtained since the central bank began a cycle of monetary easing at its September meeting, at the beginning of this month. At the time, Fed Chairman Jerome Powell indicated that policymakers would be paying much more attention to the labor market, saying they view the “risks to achieving our employment and inflation objectives as roughly balanced, and we are watching the risks for both sides”. of our dual mandate.” Remember that about two-thirds of U.S. economic activity is driven by consumer spending. As a result, stable jobs and wages are key to avoiding a recession. Economists expect 150,000 additions in September on nonfarm payrolls, a steady 4.2% unemployment rate and a 3.8% annual increase in hourly wages, which would also be in line with August prior to Friday’s jobs report. ADP releases its September analysis of hiring trends at U.S. companies. The Street is looking for 125,000 private payroll additions While it is an important report, the ADP is primarily used to hurt payroll numbers. government nonfarm payments.As a barometer, ADP has been doing better lately, after having been largely inactive during Covid and immediately after the pandemic. Beer business Constellation Brands is expected to report before Thursday’s open. The Modelo, Corona and Pacifico company updated its guidance for fiscal 2025 on Sept. 3, lowering its net sales outlook to reflect slight headwinds in its beer business and ongoing challenges in wine and spirits. However, the market took the news in stride because the shares’ recent weakness already reflected the sluggish sales environment. There was also a sigh of relief as management raised the lower end of its full-year earnings per share outlook on the expectation that higher beer margins would offset slower top-line growth. With this review complete, we will be focused on Constellation Brands’ ability to improve beer volumes and maintain strong margins in the coming quarters. We’re also curious to know what new plans management has for the wine and spirits business and whether they stepped up the company’s share buyback program after shares fell below $240 a share in late summer. Next Week, Monday, September 30th Before the Bell: Carnival (CCL) Tuesday, October 1st 10am ET: ISM Manufacturing PMI 10am ET: JOLTS Job Openings Before the Bell: Paychex (PAYX), McCormick & Co (MKC) After the Bell: Nike (NKE) Wednesday, October 2nd 8:15am ET: September ADP Report Before the Bell: Conagra (CAG) After the Bell: Levi Strauss (LEVI) Thursday, October 3rd 8:30am ET: Initial Unemployment Claims 10 a.m. ET: Factory Orders 10 a.m. ET: ISM Services PMI Before the Bell: Constellation Brands (STZ) Friday, Oct. 4 8:30 a.m. ET: September Employment Report (see here for a list full share of shares in Jim Cramer’s Charitable Trust.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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People walk out of the New York Stock Exchange (NYSE) on September 13, 2024, in New York City.
Spencer Platt | Getty Images
THE S&P 500 The index fell on Friday but posted its third consecutive weekly gain after three record closes last week.
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