Market at a Glance
October 31, 2024
Dow 41763.46 | S&P 5705.45 | NASDAQ 18095.15 | Russell 2K 2196.65 | NYSE 19238.95 | Value Line Arith 10869.21
Seasonal: Bullish. November is the first month of the Best 6 & 8 Months, and the first month of the best consecutive three-month span, November to January. November is also the best S&P 500 month of the year since 1950, second best for DJIA and NASDAQ (since 1971). In election years, November maintains its top month status with average gains ranging from 0.6% by NASDAQ to 2.5% by Russell 2000 (since 1979).
Fundamental: Landed Softly. Yesterday’s Q3 (advance estimate) of GDP was 2.8%. This is a modest slowing from Q2’s 3% but still a fair number. Employment data has also softened slightly yet remains adequate with continued monthly job gains. Inflation remains a thorn as its pace of retreat has slowed substantially while remaining above 2%. Corporate earnings are following a similar trend, slightly softer than first estimates, but still growing although with some notable individual company beats and misses.
Technical: Consolidating. DJIA, S&P 500, and finally NASDAQ broke out to new all-time highs in October but are pulling back ahead of Election Day. DJIA was first to start pulling back and closed below its 50-day moving average today. S&P 500 and NASDAQ are just above their respective 50-day moving averages. Levels to watch are around DJIA 41500, S&P 500 around 5650 and NASDAQ 17800.
Monetary: 4.75 – 5.00%. If you get selective with inflation data, another 0.25% interest rate reduction from the Fed next week seems reasonable. However, it may not be that simple as inflation data is still above the Fed’s stated 2% target and the pace of inflation’s retreat appears to be stalling out. Personal Consumption Expenditures (PCE) excluding food and energy or “core” PCE, has been lingering around 2.6-2.7% year-over-year since May.
Sentiment: Bulls Moderate. According to Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 57.6%. Correction advisors were at 20.4% while Bearish advisors numbered 22.0% as of their October 30 release. Bullish advisors tended to drift higher throughout most of October, peaking at 58.3% before easing to the current reading. Overall sentiment remains bullish, and historically it is not unusual for it to remain so through yearend.