Market Recap
Last week, Wall Street experienced a notable rally, with the DJIA and S&P 500 nearing record highs. This surge was driven by Fed Chair Jerome Powell’s indication that rate cuts might be on the way, suggesting a potential easing of monetary policy that investors are anticipating.
The DJIA surpassed 41,000 for only the second time, and the S&P 500 approached unprecedented levels as optimism spread across the market.
In this bullish environment, small-cap stocks outperformed large-cap stocks, reflecting increased investor confidence in riskier assets. Growth stocks also saw significant gains, outpacing value stocks as investors favored companies with higher potential earnings in a lower interest rate environment.
The highlight of the week was Powell’s speech at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming. Stocks surged immediately following the release of his speech, in which he suggested that “the time has come for policy to adjust.”
Wall Street interpreted this as a signal that rates might be reduced in the upcoming September meeting, with some speculating a 50 basis point cut instead of the usual 25 basis points.
The Week in Charts
What’s Going On In Your Portfolio?
Client portfolios are fully invested at this time, favoring value names over their growth counterparts. As mentioned in this week’s video update, small cap value presents a unique opportunity at this time.
Bond portfolios continue to be fully invested in High Yield bonds, which is an indication that the longer term trend of the market is still intact.
Upcoming Economic Data to Keep an Eye On
Source: Trading Economics
