Consumer Spending and Walmart's Insights
S&P 500 Inches Higher as Strong Week Nears End Amid Soft Landing Bets
Peacock's Sports Investment
The U.S. stock market is set to close out its strongest week of 2024 as optimism grows over the Federal Reserve's ability to manage a "soft landing" for the economy. The S&P 500 edged higher on Friday, continuing its positive momentum driven by strong economic data and easing inflation concerns.
Key Highlights:
- S&P 500 Performance: The index gained 1.6% on Thursday, reaching its highest level since July 23, and has climbed around 3.7% for the week. This marks the best weekly performance since November 2023.
- Nasdaq Surge: Megacap tech stocks have fueled a more than 5% increase in the Nasdaq this week, contributing significantly to the overall market rally.
- Economic Indicators: A stronger-than-expected retail sales report and a decline in weekly jobless claims have bolstered investor confidence. Additionally, July's inflation reading showed headline price pressures falling below 3% for the first time in three years.
- Fed's Role: Investors are increasingly confident that the Federal Reserve can tame inflation without triggering a near-term recession. The Atlanta Fed's GDPNow tool projects a 2.4% growth rate for the current quarter. The probability of a 25 basis point rate cut in September remains at 70.5%, according to CME Group's FedWatch.
- Treasury Yields and Dollar Movement: The 10-year Treasury yield held steady at 3.884%, while the 2-year yield ticked slightly higher to 4.060%. The U.S. dollar index dipped 0.16% to 102.810, heading for its third consecutive weekly decline.
- European Markets: The Stoxx 600 index rose 0.46% in early trading in Frankfurt, on track for its best week since May. Meanwhile, Britain's FTSE 100 slipped 0.42%, breaking a five-day winning streak but still on course for its best week since early spring.
1. Market Momentum
The S&P 500 and Nasdaq Composite extended their winning streaks to six days on Thursday, rising 1.61% and 2.34%, respectively. The Dow Jones Industrial Average also gained 1.39%, marking its third consecutive positive session. Investors are buoyed by positive economic data, which has driven the major indices up between 2.5% and 5% for the week so far, despite concerns earlier in the month following a disappointing jobs report.
2. Consumer Spending and Walmart's Insights
Consumer spending remains robust, with July retail sales increasing by 1%, surpassing expectations. Walmart CEO Doug McMillon noted that prices for many groceries and other items are beginning to fall, easing some financial pressures for consumers. McMillon emphasized that Walmart is actively working to counteract any remaining cost increases.
3. Kamala Harris' Economic Proposals
Vice President Kamala Harris, the Democratic presidential nominee, is set to introduce a series of economic proposals she would pursue within her first 100 days if elected. These include reducing the cost of groceries and prescription drugs, expanding affordable housing, and providing tax cuts for the middle class. Harris' campaign aims to address significant financial challenges facing American families. Recent polls suggest she has closed the gap with former President Donald Trump.
4. Peacock's Sports Investment
Comcast's streaming service, Peacock, is increasingly investing in sports content. NBC has committed $2.45 billion per year to broadcast NBA games starting in 2025. Peacock previously aired its first exclusive NFL playoff game in January, leading to a boost in new subscribers who have since explored other content on the platform. NBC Sports President Rick Cordella highlighted the reduced churn rates among these new subscribers.
5. Russian Cybersecurity Fraud Exposed
A CNBC investigation reveals a sophisticated Russian hacking operation, dubbed "The Crimes of Putin's Trader," which involved intercepting nonpublic information from American corporations and profiting from insider trading. Russian oligarch Vladislav Klyushin was among those charged by U.S. authorities in 2021 for his role in the scheme. The details of this operation are explored in CNBC's new podcast by Eamon Javers.
Market Outlook:
As the S&P 500 heads into the final trading day of the week, futures indicate a slight dip at the opening bell, with the index expected to open around 3 points lower. The Dow Jones Industrial Average is projected to gain 3 points, while the Nasdaq is set to rise by 8 points.
The strong weekly performance reflects growing optimism among investors that the U.S. economy can navigate through current challenges without a significant downturn. However, with the market near its recent highs, traders will be watching closely for any signs of a pullback or renewed volatility.