Stock Market Update
The stock market reached record highs at the end of the week as investors absorbed the Federal Reserve’s interest rate cut and speculated on future policies.
Upcoming Events
The upcoming week will feature several speeches from Federal Reserve officials, including newly appointed board member Stephen Miran on Monday and Fed Chair Jay Powell on Tuesday, significant for those closely monitoring Fed activities.
Earnings Reports and Economic Data
Additionally, investors can expect major earnings reports and some economic indicators as they navigate a quiet period between earnings seasons. A vital highlight will be the Friday report on inflation, revealing that the “core” PCE inflation rate dropped to 0.2% in August, while annual growth remained at 2.9%, exceeding the Fed’s target.
Consumer Sentiment and Mortgage Rates
Investors will also monitor the consumer sentiment index from the University of Michigan, set for release on Friday, along with mortgage rates, which remain near their lowest levels in a year, as reported by Freddie Mac.
Focus on Key Earnings
This week’s earnings focus will be on Micron Technology (MU), with keen interest in updates regarding AI-driven demand and revenue guidance, and Costco (COST), a key metric for consumer spending trends.
Market Reactions
Following the expected rate cut by the Fed, which investors anticipated the previous week, markets reacted positively. On Thursday, the S&P 500, Nasdaq, and Dow indices closed at all-time highs for the first time since 2021, with the three major indexes reaching record levels again on Friday.
Market Inflows and Trade Risks
According to Bank of America, this week saw significant inflows into US stocks totaling $57.7 billion, while investors moved nearly $5 billion out of cash, marking the first weekly outflow since July. Concerns about an overheated market appear to be unfounded as trade risks have eased, with ongoing talks between US and Chinese officials.
