The Elect

Markets trended lower last week, with the major indices following disappointing news for a multitude of companies. The S&P 500 solo winning sector was Communication Services, while laggards were led by Information Technology and Real Estate. Gold hit a new record high on October 30th. This week is an important one, as you might guess, between the U.S. Presidential election and the next FOMC interest rate decision.

Weekly Performance

Data Source: Factset®        Performance Period:      10/28/2024  to 11/1/2024

Last week brought several mixed economic data points ahead of the U.S. presidential election. October’s consumer confidence reading rose to 108.7, soaring above expectations of 99.5. Jobs openings in September dropped below the forecast to 7.44 million. The ADP employment report told a different story for the labor market, when it revealed that 233,000 new hires were added in October, blowing past the anticipated 113,000 increase in hiring. GDP increased by 2.8% for the third quarter, a bit below the forecasted 3.1% rise. Pending home sales for September vastly outpaced estimates of a 0.7% rise by surging 7.4%. On Thursday, initial jobless claims came in below expectations, signaling resilience in the labor market alongside the ADP employment report. Personal income matched the anticipated 0.3% rise, and personal spending edged higher with a 0.5% increase. Personal Consumption Expenditures (PCE), a measure of inflation, rose only 2.1% year-over-year as of September – nearing the Federal Reserve’s target inflation rate of 2%. The employment cost index for the third quarter increased only 0.8%, a bit below the 0.9% change predicted and seen in the prior reading. On Friday, the U.S. employment report plummeted below forecasts by adding only 12,000 jobs last month despite the anticipated 110,000 increase. The U.S. unemployment rate maintained its 4.1% stance for October, and hourly wages edged up slightly by 0.4%.

This week brings significant news between Tuesday’s election and the next much-anticipated FOMC interest rate decision on Thursday. The week also brings factory orders data, which is important given recent weakness in manufacturing. Initial jobless claims brings a weekly update to the labor market. Wholesale inventories and consumer credit are also slated for release on Thursday for further economic insights.

This is a politically pivotal week, with the election. There are many theories surrounding market movements during election season. Although policy proposals are something that companies need to prepare for, anticipating stock market outcomes based on election victors is virtually impossible. There are so many other factors at play in the economy, such as recessionary indicators, inflation levels, and industry-specific volatility. This election season, many businesses have reportedly been in limbo. Whether it’s holding off on hiring, new orders, or beginning new projects, the uncertainty has paused the plans of many enterprises that may need to pivot depending on the outcome. Despite the uncertainty, the S&P 500, Nasdaq, and the Dow all hit new record highs in October. This highlights the idea that having a long-term diversified strategy is superior to navigating the fog of the future based on assumptions. As Ecclesiastes 11:2 states, “But divide your investments among many places, for you do not know what risks might lie ahead.”

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

 Sources: Yahoo Finance, Reuters.com, and JP Morgan Market Insights. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through Faithward Advisors LLC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. 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.