WEEKLY MARKET UPDATE 8/30/2024

Despite falling over 6% in the first three trading days of August, the S&P 500 was able to finish the month up over 1% as inflation has continued to normalize and interest rate cuts have come into view.  This week we also saw second quarter GDP growth revised up to +3%, which calmed fears of a slowing economy.  Next week will be shortened by the Labor Day holiday, but all eyes will be on Friday’s jobs report for August as investors gauge whether the Federal Reserve will cut rates on September 18th by twenty-five (0.25%) or fifty basis points (0.50%).

HALTED HOME SALES

Next month’s much anticipated interest rate cuts cannot come soon enough for the housing market.  Per the National Association of Realtors (NAR), signed contracts fell 5.5% in July from a month prior and the Pending Home Sales Index fell to its lowest reading since the series started in 2001.  It is unclear if a quarter or half point cut in interest rates is enough to overcome the affordability issues that plague the housing market, but we will be closely watching for how sales activity and home prices react to the Fed’s decision

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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