10 Items to Know About the Markets

by Fortem Financial September 17, 2024

This is the second-longest period between the Fed's last rate hike and the first cut (146 days). However, the return during the current pause has been the strongest.
Going back to 1995, Consumer Staples, Health Care, and Utilities have been the strongest performing sectors after the first Fed rate cut in a series.
The real 10-year Treasury yield and the real Fed Funds rate are approaching levels that preceded recessions and would be considered “tight.”
The price of gold has risen 35% in the past 12 months. The Technology and Communications sectors have historically been the best performers after such increases.
Current S&P Earnings projections for 2025 (~$280) would result in record profit margins.
The greatest negative delta among “sectors” when it comes to their earnings contribution and market capitalization rests with the Magnificent 7 (24.4% vs. 30.8%). Financials have the greatest positive divergence (17.8% vs. 13%).
Historically, an un-inversion of the yield curve has benefitted the Energy, Consumer Staples, and Health Care sectors.
From $31 to $35 trillion in total US debt, each additional trillion dollars has been reached in a little less than six months.
Net interest expenses as a percentage of tax revenues now rest at 17% and are nearly equal to America’s defense budget.
More than 55% of America’s outstanding debt matures within the next three years. The weighted average cost of our debt outstanding is 3.49%, a rate lower than the yield on most current Treasury securities.

Source: Strategas

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by Refinitiv.

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Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

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The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

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