weekly market update 9/27/24

Markets continued to digest last week’s interest rate cut announcement, but stocks grinded higher as expectations for a soft economic landing coupled with the odds for another 50-basis point (0.5%) cut in November both increased.  Fiscal stimulus announcements out of China also buoyed investor sentiment as Beijing surprised markets by unveiling more robust economic support measures than expected.  After Friday’s inflation data came in slightly lower than expected the S&P 500 did attempt to end the week at all-time highs, but an Israeli strike on Hezbollah headquarters in Beirut, Lebanon seemed to coincide with stocks giving back the morning’s gains.  Next week will bring several important labor market data releases, but none more important than Friday’s employment report for September.

LOOMING EAST COAST PORT STRIKE

Inflation and economic growth data have recently supported markets, but a potential strike from the International Longshoremen's Association (ILA) starting October 1st could complicate matters.  Negotiations between the ILA, North America’s largest longshoremen’s union with 85,000 members, and the US Maritime Alliance are deadlocked and 14 major ports that handle approximately 40% of US shipping volume could be significantly impacted.  Importers have sought to mitigate the potential fallout from a port strike by rerouting shipments to West Coast ports, but any meaningful work stoppage should have a material drag on GDP.  We do not expect an extended strike as we suspect either a deal will be struck or the government will likely intervene, but we are watching this situation very closely.

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

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