Economic Data and Market Highlights
Stocks fell during the week as the MSCI ACWI dropped 2.11%. The Russell 1000 dropped 1.82% but the drop was largely due to growth related names. The Russell 1000 Growth fell 3.95% while the Russell 1000 Value rose 67 basis points. This week the markets were driven by political momentum and former President Trump officially becoming the nominee for the Republican party. The news cycle was largely dominated by the candidate’s statements favoring less regulation and industrial and traditional energy names. Energy names rose 2.06%, Financials rose 1.19%, and Consumer Staples rose 1.01%. Another reversal of note was in small cap names. With a rate cut largely expected in the September meeting, small cap names have risen 6.72% since June 30th.
The news cycle this upcoming week will be dominated by the decision of President Biden on Sunday afternoon to withdraw from the presidential race as the Democratic candidate. Biden’s endorsement of his Vice President Kamala Harris, seems as of the writing of this, to be the most likely candidate, but voters may have to wait until the Democratic Convention. Equity futures drop modestly on the news but have since risen. Bitcoin also dropped almost 2% but has also reversed course and was positive as of this writing.
Volume was muted on Friday as Crowdstrike, a cybersecurity firm, issued an update to most Microsoft Windows users which resulted in glitches and bugs that resulted in widespread industry shutdowns. Crowdstrike maintains it was a bug and not a cyber security breach. One of the hardest hit industries was the airlines. Most airlines were forced to cancel flights on Friday and have been slow to come back online leaving many passengers stranded. Delta had to cancel 1300 flights on Sunday. Southwest was not operating on the latest version and remained operational.
Through June 30th, taxable bond funds pulled in $230B, representing 87% of net fund flows in the first half of 2024. While US equity funds have struggled as far as inflows, S&P 500-tracking funds have been a standout, taking in $69B so far this year, while all other US equity funds shed around $44B.
Hedge fund bets on gold jumped to the highest level in four years, pointing to concerns related to Fed interest rate cut timing and the upcoming presidential election. Bullion hit an all-time high of $2,483.74 an ounce during trading on Wednesday. Bitcoin was also bolstered by the Trump trade, rising 16.56% for the week, as the candidate has made several positive comments regarding the asset. Concerns related to the US Dollar also played a role in its rise.
Higher rates and signs of unemployment starting to tick up have started to cool the housing market slightly. Data complied by Redfin and presented in the chart below show the greatest number of homes on the market with price cuts since 2022. Data compiled is on a rolling four-week basis.
The Past Week’s notable US data points 
The Upcoming Week’s notable US data points
Data Source: Blackrock, Bloomberg, Charles Schwab, CNBC, Goldman Sachs, J.P. Morgan, Morningstar, MarketWatch, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director, Head of Research
Michael McNamara, Analyst
Sam Morris, Analyst