Is the Stock Market’s Best Week of 2024 Set to Continue?

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Is the Stock Market’s Best Week of 2024 Set to Continue?

Last week was the best week for stocks in 2024, as all three major stock market indexes posted their best results of the year.

It is a bit unusual, as August is typically a sleepy month for the stock market, but this August has been anything but sleepy. Just two weeks ago, on August 5, the markets had their worst day of the year, with the plummeting more than 1,000 points and the dropped 3.4%.

However, the markets gained back much of what it lost that day, and the momentum carried into last week, the best week for stocks this year. Will the forward momentum spill over into this week?

Nasdaq gains 5.3%

Since hitting a closing high of 18,647 on July 10, the dropped some 13% to 16,200 on August 5 after the market ******. But it has gained back about 9% since then, with the bulk of that coming last week, when it had its best week of the year, rising 5.3% to close Friday at 17,632.

The also outperformed, rising 3.9% to 5,554 last week, while the Dow Jones Industrial Average surged 2.9%. Like the Nasdaq, this was the best week of 2024 for the S&P 500 and the Dow.

The also surged, rising 2.9% to 2,142 at the close of the market Friday, but this was not its best week of the year. The Russell 2000 rose roughly 6% in the week ended July 12.

There was a confluence of factors that made it the best week for stocks, most notably, the Consumer Price Index (CPI) fell for the fourth straight month. The July CPI report, which came out on Wednesday, placed the inflation rate at 2.9%, which is the first time since March 2021 that it has been below 3%.

The good economic news kept coming Thursday and Friday. On Thursday, the Census Bureau released the Retail Sales report that showed retail sales up 1% in July, which was better than expected. This further quelled investors’ fears of an economic slowdown.

Then on Friday, the University of Michigan’s Consumer Sentiment Survey climbed 2.1% in August, which was much more than economists had expected. The sharp increase indicates that consumers are more hopeful about the state of the economy going forward.

Markets higher Monday, Powell speaks Friday

The markets are trading higher Monday at the time of writing.

There isn’t as much key economic data on the docket this week, although Thursday and Friday features initial jobless claims, along with reports on manufacturing and new and existing home sales.

But it is a big week for the Fed, as the of the July FOMC meeting are released Wednesday and Fed Chair Jerome Powell speaks Friday at the annual Economic Symposium, hosted by the Kansas City Fed.

This annual gathering of central bankers, policymakers, academics, and economists is always closely watched, and this year perhaps even more so, as it is Powell’s first major speech since the July FOMC meeting. Most investors are expecting the Fed to cut the Federal Funds rate in September, so they will be looking for clues in Powell’s speech on Friday.

Retail earnings this week

Earnings season is slowing down, but retailers take center stage as this week features reports from Lowe’s Companies Inc (NYSE:), Target Corporation (NYSE:), Macy’s Inc (NYSE:), and BJ’s Wholesale Club Holdings Inc (NYSE:).

Also, tech company Palo Alto Networks (NASDAQ:) reports earnings Monday after the market closes, while Snowflake (NYSE:NYSE:), which Warren Buffett and Berkshire Hathaway (NYSE:) just completely sold off, reports Thursday.

Last week will be a tough act to follow, but there is some potential for the momentum to continue, particularly on Friday, as all ears will be on Jackson ***** and Powell.

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