Wall St wraps up best week of the year as recession fears fade
By Stephen Culp
Fri August 16,
2024 6:39 PM
Four consecutive days of gains have now completely turned the tables. After suffering the worst weekly losses of the year two weeks ago, we have now got the greatest weekly gains in 10 months to end this week, all on dramatically falling fears of recession and equally increasing optimism for a September rate cut. This week we’ve not only gotten very encouraging data on CPI, retail sales and unemployment, but today we got a 1-1/2 year low on new housing starts to cool down the hot housing market as well as U of M Consumer Sentiment data coming in with stronger than expected improvement.
Adding to that was the Chicago Fed prez warning against keeping rates high much longer. But, as everyone has agreed that rate cut optimism and pessimism has been the market’s major driver this year, the odds have changed wildly in the last two weeks, from 80/20 for a ½ vs ¼ point hike three weeks ago to 25/75 a week ago Monday (pessimism that the Fed would go for the much wanted ½ point cut), to 50/50 a couple days ago, to back to 25/75 today (optimism that a ¼ point cut may indeed be sufficient for now). So, yes, all eyes are laser focused on Jackson Hole next week. Volume was 10.1 billion, still well below the 4-week average of 12.3 billion.
DJ: 40,563.06 +554.67 NAS: 17,594.50 +401.90 S&P: 5,543.22 +88.01 8/15
DJ: 40,659.76 +96.70 NAS: 17,631.72 +37.22 S&P: 5,554.25 +11.03 8/16
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