Preparation and Partnerships

Despite some volatility in the markets last week, major indices have trended upward. For the S&P 500 sector performance, Information Technology and Real Estate led gains, while Energy and Financials lagged. Big news comes with the FOMC interest rate decision this week, as markets have optimistically priced in rate cuts. The question surrounding the cuts appears not to be a matter of “if” but a matter of “how deep.”

Weekly Performance

Data Source: Factset®        Performance Period:      9/9/2024  to 9/13/2024

Last week in the economy, new inflation data came out, as well as insight into small businesses and the consumer. On Monday, consumer credit data for July was released around $25 billion, much higher than the anticipated $12 billion and reaching a new record in total consumer debt. The NFIB small business optimism index was slightly lower than expected at 91.2 versus the forecasted 93.6 reading. The consumer price index (CPI) for August matched the 0.2% forecast. However, core CPI, a measure of consumer prices apart from the volatility of energy and food, ticked slightly higher to 0.3%. The producer price index (PPI), a measure of input costs, was a bit above the forecast by increasing 0.2% for August. In summary, inflation data through CPI and PPI came in slightly warmer than expected, consumer credit reached a new all-time high, and small business optimism tapered off a bit. These are not great signs for the economy, but all ones that could be.

This week brings even more big economic data. In the realm of business activity, U.S. retail sales and business inventories data are released. For insight into the housing market, the home builder confidence index, housing starts, building permits, and existing home sales data will also be released. The most prominent item on the economic calendar for the week is the FOMC interest rate decision. This decision is what markets have been pricing in for months with the expectation of a rate cut. With the magnitude of the decision being debated, there is little doubt that a cut of more than 0.25% will make markets happy.

Turning to the markets, as the economic landscape awaits policy ideas from presidential candidates, big companies continue to join forces. Mastercard made news last week when it agreed to buy the largest threat intelligence platform, Recorded Future. In an age when cybercrime has caused expensive issues and is predicted to ramp up, the acquisition will bolster Mastercard’s ability to immediately identify threats. With AI integration, Recorded Future should enhance capabilities for identity and fraud protection, as well as other cybersecurity features. Two other companies combining efforts are General Motors and Hyundai.  After spending significant capital on the creation of less-popular-than-expected electric vehicles, both companies are now focusing on ways to creatively cut back on spending. The two well-known car brands are in the agreement phase and exploring ways they can collaborate with various elements of vehicle development and materials sourcing. The aim is to remain competitive and provide more value in the cars they develop for customers.   Of course, collaboration like this is nothing new and has often led to significant benefits for both the company and consumers.  After all, Ecclesiastes 4:9 reminds us, “two people are better than one, for they can help each other succeed.”

Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights

 Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights. Securities offered through American Portfolios Financial Services, Inc. of Holbrook, New York, 631.439.4600,(APFS), member FINRA, SIPC.  Faithward Advisors is not owned or operated by APFS. Faithward Advisors offers Investment Advisory services through Ambassador Advisors, an SEC Registered Investment Advisor. Dream More, Plan More, Do More is a registered trademark of Faithward Advisors, LLC, Reg. U.S. Pat. & Tm. Off. Any opinions expressed in this forum are not the opinion or view of Faithward Advisors or American Portfolios Financial Services, Inc. (APFS). They have not been reviewed by either firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.