September 2, 2024

Weekly Market Update

By Michael McKeown, CFA, CPA - Chief Investment Officer

Weekly Market Update

Chart of the Week

The Federal Reserve is gearing up to lower interest rates for the first time this cycle at its meeting on September 18th, fourteen months after the last interest rate hike.

How have bond yields moved in the months and years after the first interest rate cut? It depends on the economy.

Historically, if there is a soft landing and economic growth continued, the 2-year yield remained relatively flat over the next few months and rose over the following two year period.

In an extended cutting cycle coincided with an economic contraction, rates were lower over the following months and years.

2-Year Yield Changes Around Fed Rate Cuts

What We’re Reading

The New Etiquette of Negotiating with Your Real Estate Agent – WSJ
A Number from Today and A Story About Tomorrow – Morgan Housel
Nothing is Certain Except Debt and Taxes – Dollars & Data
Tom Brady on the Art of Leading Teammates – Harvard Business Review

Podcast of the Week

AI, Semiconductors, and the Robotic Frontier – Invest Like the Best

Last Week

On the positive side, consumer confidence and the second quarter’s GDP report beat expectations. Inflation for personal consumption came in line with estimates. On the negative side, the manufacturing survey in August showed a contraction for the fourth straight month.

The Past Week

The Week Ahead

On Friday, payrolls will be important as the unemployment rate went from a low  of 3.4% in 2023 to July’s level of 4.3%.  Economists estimate the economy added 160,000 jobs in August. Next week, we get the much-anticipated Consumer Price Index report.

The Week Ahead

Thank you for reading.

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