Another Week, Another Record High

The S&P 500 hit a new all-time high last week, the 45^th time it’s done that in 2024. The Dow also saw a new high, after the earnings season kicked off in a positive way. Banks like JPMorgan Chase and Wells Fargo reported less-than-expected profit declines in the third quarter, offsetting several disappointing economic reports.

One area of disappointment was inflation, which ticked up by 0.2% in September. (Core inflation — which excludes food and energy — rose 0.3%.) Inflation is still at a three-year low, but it’s cooling more slowly than expected. Core prices also increased 3.3% year-over-year in September versus 3.2% in August.

Weekly jobless claims came in at 258,000, the highest level in 14 months. Many of these jobless claims were due to hurricane closures in the southeastern part of the U.S., so some of those jobs may come back as clean-up continues. Still, the jobless claims plus the uptick in inflation changed expectations for the Federal Reserve’s meeting next month, with futures markets pricing in a decent chance of the Fed shying away from another cut and keeping rates steady instead.

The minutes from the Fed’s last meeting, released last week, revealed why they chose a jumbo cut of 50 basis points (0.50%) instead of the expected cut of 25 basis points (0.25%). Based on the minutes, Fed officials were divided over what to do, with several favoring the smaller cut. It seems unlikely that we’ll see another jumbo cut this year.

Breaking Up is Hard to do

The Department of Justice is once again coming after Google. Reports came out last week that the department is considering asking a federal judge to order the company’s breakup, saying its products such as Chrome, Play and Android force users to Google Search and therefore create a monopoly. No decision has been made yet, but the news pushed Google parent Alphabet’s stocks down last week. Tesla also had a shaky week following a lukewarm response to its new “robotaxis” and “robovans.” Fortunately, NVIDIA once again saw their shares rise, keeping tech-heavy indexes steady for the week.