Price Return Last Week
S&P 500 +1.4% S&P Mid Cap +2.3% Russell 2000 +2.1%
MSCI EAFE +0.4% MSCI EM +2.2%
10 Yr US Treasury Rate – fell from 3.65% to 3.73%
Source: Refinitiv Eikon
Recent News
Fed Rate Decision – For the first time since 2020, the Federal Reserve decided to lower interest rates by 50 basis points on Wednesday. Eleven of twelve committee members voted for the action with one objecting in favor of a 25 basis point cut. It was the first time in the last 18 meetings that there was an objection to the official decision. In his press conference after the release of the decision, Fed Chairman Jerome Powell made clear that each subsequent cut will not necessarily be of the same magnitude.
Source: Refinitiv Eikon, The Wall Street Journal
Fed Dot Plot – The Federal Reserve released new economic projections for the first time since June that helped explain some of the rationale behind their most recent interest rate decision. In the release, they raised the expected unemployment rate for 2024 to 4.4% from 4% and lowered the inflation outlook to 2.3% from 2.6%. A noteworthy comment from Fed Chair Jerome Powell on Wednesday was that he thought “the neutral rate is probably significantly higher than it was [before the pandemic].” This was reflected in the new projections, which showed an increase in the projected long-term neutral rate for Fed policy from 2.8% to 2.9%.
Source: CNBC.com, The Federal Open Market Committee, The Wall Street Journal
Market Reaction – The S&P 500 rose 1.7% a day after the Fed chose to cut rates. This represents the biggest increase after a Fed meeting since 2008, when Fed Chairman Ben Bernanke cut rates by 50 basis points during the financial crisis and the market rose 2.9%.
Source: Bespoke Research
Bank of England Rate Decision – Just one day after the Fed cut rates, the Bank of England decided to leave their key rate at the same level at 5%. While they still anticipate additional cuts in the future, they noted concern around the rapid increase in service prices and wages.
Source: The Wall Street Journal
Well, Isn’t That Special? – The 50th season of Saturday Night Live kicks off this weekend. Over the last fifty years, the show has accumulated 103 Emmy wins to be the most decorated show in Emmy history. It was originally conceived by producer Lorne Michaels because Johnny Carson wanted to take more vacations and asked NBC to air his reruns during the week instead of on the weekend, leaving a hole in late night programming on Saturday’s.
Source: The Hollywood Reporter, BuzzFeed
Upcoming Events
9/24 – Consumer Confidence, Notable Earnings Reports: AutoZone
9/25 – New Home Sales, Notable Earnings Reports: Micron
9/26 – Durable Goods, Q2 GDP Final Estimate, Notable Earnings Reports: Accenture, Costco
9/27 – PCE, Consumer Sentiment, Japan Liberal Democratic Party Election
Source: Refinitiv Eikon
Comments