Hello,
Wall Street knew a change was coming, but the Fed Chair hid the details until the end.
At its September meeting, the Fed cut short-term interest rates by 0.50%, which unsettled some who thought Fed officials would be more cautious with monetary policy this close to an election. However, the Fed, comfortable with its progress on inflation but concerned about the current pace of economic growth, made a bold, decisive statement with the jumbo cut.
Now investors are asking, “What comes next?” To help lend some insight, here are a few events that we’ll be watching closely in the weeks ahead:
GDP Report: The advance estimate for Q3 gross domestic product is scheduled for release on October 30. The Fed’s GDP Now estimate shows Q3 GDP at 2.9 percent, but the GDP Now number can fluctuate as more economic data comes in. The official GDP number on October 30 will show whether the Fed is on target for its soft landing.
Inflation & Jobs: The September Consumer Price Index report is set for release on October 10. We’ll watch the report to see what’s happening with consumer prices. Various employment data are released weekly, but the next key report is the JOLTS (Job Openings and Labor Turnover Survey), set for release on October 1. The Fed now appears more concerned about the jobs market than inflation, so we’re watching both.
Fed’s Next Meeting: The Fed’s next scheduled two-day meeting concludes on November 7– right after the election. The Fed’s December meeting ends on December 18. Speculators see more rate adjustments before the end of 2024, but policymakers will be watching the GDP, jobs, and inflation data to determine what’s next. Following the Fed’s September meeting, Minneapolis Fed President Neel Kashkari said he expects policymakers to dial down the pace of interest rate cuts.
Fed Chair Powell’s keyword following the September meeting was “recalibration.” He suggested that interest rates need to respond to help manage the business cycle. That’s a different message from him since he spent the better part of two years discussing how to address inflation.
From the Fed’s September meeting notes, it’s clear that the Fed has decided to guide short-term interest rates lower. We’ll work with other professionals in the weeks ahead to see how the Fed’s decision will influence portfolio construction into 2025.
Until next week, Your Eagle Wealth Team |
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| | Hot Dog Inflation at the BallparkWhen you hear “hot dog” and “inflation” in the same sentence, you might think of those supermarket franks that plump up when cooked. In this case, we’re talking about the original dogs of the ballpark, a cultural touchstone of America’s pastime.
The average price of a Major League Baseball (MLB) hot dog across the 30 North American ballparks is $5.99, and that’s for the lowest-priced hot dog offered at the parks. That average covers a wide range, including the $8.39 “Colossal Dog” offered at Oakland Coliseum, home of the Athletics, and a $2.99 option at Chase Field, where the Arizona Diamondbacks play.1
You'll need to grab your passport if you’re looking for the cheapest dog in the MLB. When you take in a Toronto Blue Jays home game, you can find a $2.55 hot dog at Roger Centre.1
From the chart, you can see that seven of the top ten highest-priced dogs are for teams that may not make the playoffs. On the other hand, eight of the ten least expensive dogs are at stadiums where teams are fighting for a playoff spot.
While consumers are used to seeing a mark-up on concessions at movie theaters, concerts, and sporting events, MLB offers a relatively inexpensive option compared to the National Football League (NFL).
The average cost for a family of four is $180.54, which figures tickets, parking, beverages, and (of course) hot dogs. That range is higher in some cities, over $320 in Los Angeles (the Dodgers) or Boston (the Red Sox), and lower in others. A family can see a game for under $140 in a handful of lower-end markets: the Cincinnati Reds, Colorado Rockies, Cleveland Guardians, Kansas City Royals, and Chicago White Sox.2
The reason for the boosted prices? Concessions play a big part in maintaining the grounds and paying for the teams. Dodgers pitcher Shohei Ohtani inked a $700 million, 10-year contract with the team. That means the Dodgers hope you show up to the game hungry!2
As the season winds down, we hope you have enjoyed a few games, whether at the ballpark or at home.
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The Week on Wall StreetStocks moved higher last week after the Federal Reserve’s half-point rate cut, bolstered by multiple data points supporting a cooling but still strong economy and decelerating inflation.
The Standard & Poor’s 500 Index gained 1.36 percent, while the Nasdaq Composite rose 1.49 percent. The Dow Jones Industrial Average moved ahead by 1.62 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, inched up 0.42 percent.3,4 Fed Cuts Rate 0.5 Percent Stocks traded in a narrow range for the first half of the week as anxious investors awaited the outcome of the Federal Open Market Committee’s (FOMC) September meeting.5,6
Shortly after 2 pm ET Wednesday, the Fed announced it was cutting rates by a half percentage point—a more significant cut than some investors anticipated. Stocks initially rose in response and then fell. Some market watchers attributed the decline to concern that the Fed might be concerned about economic growth.7,8
But after sleeping on it, stocks rallied Thursday, with the Nasdaq, S&P, and Dow climbing 2.5 percent, 1.7 percent, and 1.3 percent, respectively. The Dow topped 42,000 for the first time, while the S&P crossed the 5,700 mark.9,10 Fed's MoveThe half-point cut was the first change in the Fed Funds Rate in 14 months and the first reduction in 4½ years, bringing its target range to 4.75-5.0 percent. Fed Chair Powell said the decision reflected the Committee’s “greater confidence that inflation is moving sustainably toward 2 percent” and that the “risks to achieving its employment and inflation goals are roughly in balance.”11 |
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Past performance is not a guarantee of future results. Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance.
Source: YCharts.com, September 21, 2024. Weekly performance is measured from Monday, September 16, to Friday, September 20. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points. |
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Any forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.
AtlantaFed.org, September 20, 2024
BureauOfEconomicAnalysis.gov, September 20, 2024
BLS.gov, September 20, 2024
FederalReserve.gov, 2024
1. Sports Business Journal, May 6, 2024
2. The Street, April 12, 2024
3. The Wall Street Journal, September 20, 2024
4. Investing.com, September 20, 2024
5. CNBC.com, September 16, 2024
6. The Wall Street Journal, September 18, 2024
7. CNBC.com, September 18, 2024
8. The Wall Street Journal, September 18, 2024
9. The Wall Street Journal, September 19, 2024
10. The Wall Street Journal, September 20, 2024
11. The Wall Street Journal, September 18, 2024 Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 FMG Suite. |
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