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Equity Market Gyrate on AI & Interest Rate Uncertainty
Despite major U.S. and international equity indexes squeaking out a positive week, it didn’t come without some choppiness. Global equities, measured by the MSCI All Country World Index (ACWI), rose 0.45%, while U.S. equities, represented by the S&P 500, remained essentially flat. While a flat week doesn’t sound choppy, the S&P 500 was up 1.8% through Wednesday and then gave back all of that gain by the end of the week.
Earnings Season Update
We’ve mentioned it throughout this quarter, but corporate earnings continue to remain resilient. As we look forward to the end of the season, quite possibly the most important company to report will do so this Wednesday when Nvidia officially releases their most recent quarterly financials.
Government Shutdown Ends
The government shutdown came to an end last week after 43 days. Investors often feel anxious about their portfolios during political uncertainty such as the shutdown, but its worth noting that the S&P 500 index was up over 2% over the duration. It is further proof that the markets care more about long-term growth and earnings over short-term political battles.
Other Notable News
One of the more interesting items recently has been the market predicting the next move for the Fed. After two consecutive rate cuts, markets had been pricing in a likely third cut in December. As we sit here today, the odds have changed to a borderline coinflip, which the slight odds going to rates remaining at current levels.
Looking Ahead
For the week ahead, important economic releases include jobs and sentiment. On Thursday, the delayed September jobs report will be released and we’ll get an updated consumer sentiment report on Friday.
As Always
I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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