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Weekly Market Recap | 09/30/2024

What Happened Last Week

  • China: Property market support was announced over the weekend in major cities in addition to the raft of monetary and fiscal measures released last week.
  • International Equities: China-led emerging markets drove international equities to their strongest week versus U.S. stocks since 4Q22.
  • U.S. Equities: S&P 500 hit fresh all-time highs (again!).

What We’re Watching This Week

  • U.S. Data: Friday’s jobs report is the highlight; economists expect payrolls growth to decline relative to the healthy readings of the past six months.
  • China: As markets readjust to the new policy moves from Beijing, expect heightened volatility due to the week-long closure of local markets for the Golden Week celebration.
  • Middle East: Israel’s continued strikes on Hezbollah may wake up investors to renewed tail risks of regional escalation in the conflict-riven, resource-rich Middle East.

Investment Management Team’s Views

  • The global monetary easing party, kicked off by the Fed’s super-sized cut a week and a half ago, went global last week as China delivered a “bazooka stimulus” package geared toward stemming the risk of a deflationary spiral. Against the backdrop of very poor investor sentiment, the size and coordination of the mostly monetary stimulus (with promises of future fiscal support) were enough to drive the largest rally in Chinese equities since 2008. Emerging markets and broad international equities gained strongly in the biggest weekly outperformance of international stocks over U.S. ones since late 2022. Despite the magnitude of last week’s international move, we did not see a major cross-asset reaction across domestic equities or interest rates, but the S&P 500 did manage to notch its 44th all-time high of the year.
  • Much remains uncertain about the impact of China’s policy pivot on market price action and global growth, but it is no doubt a positive development. Shifting back to the U.S., revisions to the growth data last week also painted a positive picture and closed the puzzling gaps in the data in favor of economic strength. Although the revisions are a welcome source of clarity, much of that growth data is backward-looking. We are watching how the most rate-sensitive sectors respond as a leading indicator of the economy and future markets. Mortgage activity, for example, has already started to pick up, albeit only by a small amount.
  • Friday’s jobs report will take center stage as economists expect a downshift in payroll growth. The JOLTS report on Tuesday will also shed light on any changes to labor supply and demand dynamics. Outside the U.S., all eyes will be on China, although additional measures are less likely in the near term due to their Golden Week holiday. Developments in the Middle East, with the war around Israel shifting its gravity northward towards Lebanon, also have our attention; barring an Iranian intervention or regional spillover, we view a cross-asset market reaction as unlikely.

The Job Openings and Labor Turnover Survey (JOLTS) program produces data on job openings, hires, and separations. The commentary in this report is not a complete analysis of every material fact with respect to any company, industry, or security. The opinions expressed here are not investment recommendations, but rather opinions that reflect the judgment of Horizon as of the date of the report and are subject to change without notice. Forward-looking statements cannot be guaranteed. We do not intend and will not endeavor to provide notice if and when our opinions or actions change. This document does not constitute an offer to sell or a solicitation of an offer to buy any security or product and may not be relied upon in connection with the purchase or sale of any security or device. Before investing, an investor should consider his or her investment goals and risk comfort levels and consult with his or her investment adviser and tax professional. Equities are represented by the S&P 500 Index, which is a market- capitalization-weighted index of the 500 largest U.S. publicly traded companies. Emerging Markets and International Equities are represented here by broad-based emerging markets and international equities indices; contact us for more information. References to indices or other measures of relative market performance over a specified period of time are provided for informational purposes only.

Reference to an index does not imply that any account will achieve returns, volatility, or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. 

This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such.

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