TRG Fast Facts

By TRG Advisors on October 18, 2024

Weekly data-driven insights on the markets and economy

1. Equities Continue Records

The S&P 500 hit fresh new record highs this week, and the Dow Jones surpassed 43,000 as equity markets continue their climbs higher. A combination of lower oil, mixed inflation readings, and chasing tech stocks with AI fever lifted all indices, especially semiconductor stocks. Bank earnings will be in particular focus this week as a slew of earnings is due to come out. Among the early big-name financials this week will be Goldman Sachs, Bank of America & Citigroup.[i]

2. Mixed Inflation Readings

On the tail of higher-than-expected Consumer Price Indexes on Thursday by .01%, the Producer Price Indexes came in $.01 lower and flat for the month. Investors cheered the news by pushing the 10-Year bond rate lower to around the 4.00% mark. Traders are betting that the strong job report and slightly higher CPI report will only allow for a 25bps rate cut come the November Fed meeting.[ii]

3. Oil’s Slippery Slide Lower

After Middle East fears bumped crude prices slightly higher last week, they are now down more than 7% since their peak last Thursday. Reports on Monday, via the Washington Post, noted that Israel’s Prime Minister Benjamin Netanyahu told the Biden administration that Israel would avoid targeting Iran’s nuclear or oil facilities when they retaliate. Adding to the weakness, the International Energy Agency said world oil demand was to slip in 2025 from its 2022-2023 period.[iii]

4. Boeing Hands Out Pink Slips

Boeing is targeting about 17,000 workers company-wide, or approximately 10% of its workforce for layoffs. The affected employee pink slips will go in waves, with some being let go on January 17, 2025 and then also February 21, 2025. There are a few employees who are safe, for now: Boeing in South Carolina, nor Machinists union District 751 and the Portland, OR machinists unit, District W24. Boeing has been plagued with troubles in 2024 ever since the Alaska Airlines fuselage panel blowout in January.[iv]

5. Investors’ Gleeful Sentiment (But with a Bit of Side-Eye)

According to Bank of America’s October Global Fund Manager Survey, investor sentiment rose to a reading of 5.6 from 3.8 last month, marking its biggest one month jump since June 2020. Many on Wall Street consider the high optimism due to markets ‘goldilocks zone’ of lower inflation and low unemployment. However, the survey did have one note of caution, which was cash allocations among investors fell to 3.9%. Bank of America noted that any reading under 4% can be considered a sell signal.[v]

6. String of College Closings

Smaller, less selective schools continue to be hit by closures, but the most elite schools in the U.S. continue to thrive. 2024’s closing of 20 schools thus far, make for a total of 40 colleges that have closed since 2020. Sticker shock of private colleges nearing six figures a year have students looking for less expensive public school, or alternatives to a four-year degree altogether. Less prestigious, non-big brand schools that are equally expensive as the Ivy Leagues, are struggling to attract applicants as students consider the costs as nowhere near reasonable.[vi]

[i] French, David, “S&P 500 ends at fresh record high, as Dow scales 43k for first time,” Reuters, October 14, 2024, https://www.reuters.com/markets/us/futures-mixed-ahead-week-packed-with-earnings-economic-data-2024-10-14/. Accessed October 15, 2024.

[ii] Mutikani, Lucia, “US producer prices flat; higher monthly core inflation expected in September,” Reuters, October 11, 2024, https://www.reuters.com/markets/us/us-producer-prices-unchanged-september-2024-10-11/. Accessed October 15, 2024.

[iii] Ferré, Ines, Oil tumbles 5% on report Israel won’t target Iranian crude, IEA prediction of supply glut,” Yahoo!Finance, October 15, 2024, https://finance.yahoo.com/news/oil-tumbles-5-on-report-israel-wont-target-iranian-crude-iea-prediction-of-supply-glut-151443888.html. Accessed October 15, 2024.

[iv] Gates, Dominic, “Boeing layoff plan suggest deep white-collar job cuts,” The Seattle Times, October 14, 2024, https://www.seattletimes.com/business/boeing-aerospace/boeing-layoff-plan-suggests-deep-white-collar-job-cuts/. Accessed October 15, 2024.

[v] Schafer, Josh, “Investors sentiment see biggest jump since June 202 – but offers a sign of caution, Yahoo!Finance, October 15, 2024, https://finance.yahoo.com/news/investor-sentiment-sees-biggest-jump-since-june-2020–but-offers-a-sign-of-caution-150423898.html. Accessed October 15, 2024.

[vi] Dickler, Jessica, “More colleges set to close in 2025, even as ‘Ivy Plus’ schools experience application boom,” CNBC, October 15, 2024, https://www.cnbc.com/2024/10/15/more-colleges-set-to-close-in-2025-while-ivy-plus-schools-thrive.html. Accessed October 15, 2024.