WEEKLY MARKET UPDATE 7/26/2024

Despite the S&P 500 registering its first 2% decline on Wednesday in 356 trading days, the 10th longest streak since 1950, stocks rallied into the weekend, as investors increasingly anticipate an interest rate cut in September.  Nonetheless, the S&P 500 posted its second straight week of losses, as the rotation out of the Magnificent 7 (Google, Meta, Apple, Amazon, Tesla, Nvidia, Microsoft), which make up roughly 30% of the S&P 500 by market cap, continued.  The S&P 500 is now on pace for a negative July, but areas that have underperformed in 2024 continue to rebound, with the small-cap Russell 2000 up 10% and the average S&P 500 stock up over 3% month-to-date (per RSP).  Next week over 30% of companies within the S&P 500 report earnings and the Federal Reserve will release meeting announcements on Wednesday.

LUXURY DEMAND FIZZLES

The Summer Olympics officially kick off Friday, enabling host country France to showcase its rich history and beautiful views, but it was a tough week for France’s largest company, Louis Vuitton.  The luxury bellwether reported earnings on Wednesday and every segment missed expectations ranging from wines & spirits, handbags, perfumes, to watches & jewelry.  Champagne sales were notably weak, down 15% in the first half of 2024, and Louis Vuitton’s CEO highlighted a global lack of “cheer”.  Weakness from China is undoubtedly a major factor, but consumers broadly appear to be reining in aspirational spending.  As a result, France’s wealthiest man, Louis Vuitton founder Bernard Arnault, has seen his year-to-date wealth fall by roughly $22B and he is now only third on the Forbes’ Billionaires List. 

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

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