Resilience Across Sectors

Last week saw mixed economic data and gains in the major stock indices, as US equities reversed course after four down weeks with the best gains since November 2023. The S&P 500 big winners were information technology and consumer discretionary. Retail and labor markets appear to be resilient, however the housing market is experiencing difficulties in the realm of affordability. Inflation appears to be decelerating and big brands are getting acquired. As new economic data points get released, forecasts around Fed rate cuts pivot and markets respond. Time will tell what happens next, but for now a look at recent data and occurrences in the markets should shed light on the current situation.

Weekly Performance

Data Source: Factset®        Performance Period:      8/12/2024  to 8/16/2024

Last week in data releases, we saw the NFIB optimism Index, a measure of small business optimism, at its highest since early 2022 at 93.7. Still, one-fourth of business owners considered inflation their main concern, as do many consumers. The Producer Price Index (PPI) was softer for July, increasing only 0.1% relative to the forecasted 0.2% rise. The Consumer Price Index (CPI) was in line with forecasts with a 0.2% change for July. Initial jobless claims were below forecasts at 227,000 relative to the estimated 236,000 rise. This boosted markets concerned over labor market weakness. Retail sales for July increased 1.0%, well above the anticipated 0.4% rise. July’s building permits and housing starts data came in on Friday with decreases of 4% and 6.8%, respectively.

This week, the U.S. leading economic indicators will give insight into potential turning points in the overall economy. Initial jobless claims are released on Thursday along with existing home sales, manufacturing and services PMI. Friday brings building permits and new home sales data for a further look into construction and housing in the economy. The week is teaming with housing data.  With the NAR settlement taking effect this week and interest rates expected to start falling in September, housing stands poised to show just how the market may shift.

Of note, a $35.9 billion acquisition of Kellog’s spin-off Kellanova will become one of the largest deals of the year year.  Brands like Cheez-Its, Town House, and Pringles will now be under the umbrella of Mars, known for its many brands including M&Ms. Price increases of the past few years have caused many consumers to find better value in generic brands. Mars is seeing opportunities for expansion outside of the United States.  The deal is expected to close within the first six months of next year. While businesses seek profits through strategic acquisitions and softening inflation data trickles in, it is a good time to remember what the Lord has said about the stewardship of the resources with which He has blessed us. Proverbs 3:9-10 tells us, “Honor the LORD with your wealth, with the first fruits of all your crops; then your barns will be filled to overflowing, and your vats will brim over with new wine.”

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.