Weekly Recap & Market Forecast $SPX (Sept 22th—> Sept 27th)

٢٣ سبتمبر

**Weekly Market Recap 🌐**

Hello Investors! 🌟 This week, the S&P 500 broke out to new all-time highs as the Fed delivered a more aggressive rate cut than some expected. Let’s dive into the key events that shaped the markets this week. 📈

**Market Overview:**

Heading into the week, the S&P 500 was already approaching fresh all-time highs, with debates intensifying over whether the Fed would cut rates by 25 or 50 bps at Wednesday's FOMC meeting. The US dollar remained weak, while interest rates were largely on hold. Positive US economic data leading up to the decision supported market optimism: September Empire manufacturing surged alongside a rebound in new orders, retail sales exceeded expectations, and housing starts reached their highest level since February, consistent with a 3% GDP growth rate. However, economic data from China and Germany remained soft, prompting renewed speculation about potential stimulus measures, particularly as the German ZEW survey hit its lowest level since May 2020. Additionally, WTI crude held steady near 70/barrel following a well-coordinated Israeli operation against Hezbollah fighters in Lebanon, raising concerns about escalating conflict.

On Wednesday, the Fed opted for a 50 bps rate cut, citing recent data points, including payroll revisions and the Beige Book. The updated dot plot projections indicated that most Fed members now anticipate 100 bps of cuts for both 2024 and 2025. Fed Chair Powell emphasized that the move was intended to "not fall behind" the curve and to adjust policy in line with where the economy is headed. This bold move drew some criticism but was largely welcomed by investors as a sign of the Fed's commitment to a more neutral monetary policy. The S&P 500 broke out to a new all-time high above 5,700, as investors celebrated the clear path to a neutral stance. By the end of the week, modest profit-taking emerged during options expiration, but the market closed strong. The Dow gained 1.6%, the S&P rose 1.4%, and the Nasdaq added 1.5% for the week.

**Stock Market Performance:**

- 📈 S&P 500: Up by 1.4%
- 📈 Dow Jones: Up by 1.6%
- 📈 NASDAQ: Up by 1.5%

**Economic Indicators:**

- **US Economic Data:** Positive signals included strong Empire manufacturing, retail sales exceeding expectations, and housing starts reaching their highest level since February.
- **FOMC Rate Cut:** The Fed delivered a 50 bps cut, with updated dot plot projections indicating an expectation for 100 bps of cuts in both 2024 and 2025.
- **Yield Curve:** The US yield curve steepened significantly following the Fed's decision.
- **Global Economic Data:** Weak data out of China and Germany led to speculation about potential government stimulus measures.
- **WTI Crude:** Held near 70/barrel amid geopolitical tensions in the Middle East.

**Corporate News:**

- **Apple:** Started the week under pressure due to reports of underwhelming new iPhone orders.
- **Amazon:** CEO Andy Jassy announced that staff would be required to return to the office for a traditional 5-day workweek in 2025.
- **Boeing:** Announced plans to conserve cash, including a hiring freeze and furloughs, while its machinists continued their strike.
- **Darden Restaurants & General Mills:** Both reported results, noting that a challenging macroeconomic environment remains a headwind.
- **Mercedes Benz & Skechers:** Warned that deteriorating conditions in China were worse than anticipated, requiring a reset of short-term expectations.
- **Nike:** Announced that veteran Elliott Hill will return as President/CEO after John Donahoe steps down next month.
- **FedEx:** Weighed down the transport sector on Friday after missing Q1 estimates and cutting its FY outlook, citing a shift away from US domestic priority package business.
- **Constellation Energy:** Reached an agreement to provide power from a restored Three Mile Island nuclear facility to Microsoft, boosting power generation and nuclear-related stocks.

**Looking Ahead:**

Next week will feature several key events:

- **Fed Chair Powell Speech**
- **U.S. PCE Inflation**
- **U.S. Housing Data**
- **U.S. Flash PMI Surveys**
- **Earnings Reports:** Costco (COST), Micron Technology (MU), and KB Home (KBH)

As we move forward, these developments will be crucial in shaping market sentiment and guiding investment decisions. If you have any questions or need further insights, feel free to reach out. Here’s to another week of informed investing and strategic decision-making! 🌟