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Extraordinary Strength. · ANGLES.

• 0:01
  SPEAKER_00: Extraordinary Strength, my weekly market review, October 20th, 2024.
• 0:08
  SPEAKER_00: The market's positive momentum from the end of the previous week followed through
• 0:11
  SPEAKER_00: into Monday after a generally quiet weekend on the news wires,
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  SPEAKER_00: and with the stock market open but bond markets closed for Columbus Day,
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  SPEAKER_00: trading volume was weak.
• 0:23
  SPEAKER_00: Prices across the board were bolstered by Fed speak from a number of committee
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  SPEAKER_00: members and senior officials that was generally pro-steady interest rate cuts.
• 0:34
  SPEAKER_00: We hit a landmark at the close.
• 0:35
  SPEAKER_00: There have now been as many new all-time record closing highs this year for the S&P
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  SPEAKER_00: 500 as there have been presidencies in the history of the United States.
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  46.
• 0:49
  SPEAKER_00: On Tuesday,
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  SPEAKER_00: Dutch chipmaker ASML Holdings shares plunged the most in 26 years after it booked
• 0:57
  SPEAKER_00: only about half the orders that analysts had expected,
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  SPEAKER_00: a startling slowdown for the Dutch company.
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  SPEAKER_00: What made it stranger was that we weren't supposed to learn that until Wednesday,
• 1:09
  SPEAKER_00: but the high-tech firm seemed unable to auto-schedule a press release properly,
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  SPEAKER_00: and the information was published a day early,
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  SPEAKER_00: which drew the concerned attention of the regulators.
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  SPEAKER_00: The contagion spread to other names in the sector and combined with another grim
• 1:28
  SPEAKER_00: session for energy stocks resulting from the continued swoon in oil prices and some
• 1:34
  SPEAKER_00: underwhelming earnings from United Health Group,
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  SPEAKER_00: CVS and Humana,
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  SPEAKER_00: it was a pretty dismal day overall for the indexes.
• 1:45
  SPEAKER_00: The financial sector resumed its role as the really bright spot in earnings on Wednesday,
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  SPEAKER_00: with Morgan Stanley reporting solid numbers.
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  SPEAKER_00: But United Airlines got in on the act as well with a very positive report.
• 1:59
  SPEAKER_00: With a reminder that it is actually possible to generate good earnings somewhere
• 2:03
  SPEAKER_00: other than just in AI,
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  SPEAKER_00: the pendulum swung back in favor of the bulls and stocks ended the day nicely higher.
• 2:13
  SPEAKER_00: There was a lot to digest before the opening bell in New York on Thursday morning.
• 2:18
  SPEAKER_00: The European Central Bank duly cut interest rates for the third time this year by a
• 2:22
  SPEAKER_00: quarter of a percent,
• 2:24
  SPEAKER_00: as expected,
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  SPEAKER_00: in an attempt to counter sluggish growth in the region.
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  SPEAKER_00: US retail sales rose by more than expected,
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  SPEAKER_00: and weekly jobless claims came in way below the expected number.
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  SPEAKER_00: These data points reinforced the extraordinary strength of the economy right now.
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  SPEAKER_00: So much so that some are now even beginning to question whether any kind of
• 2:50
  SPEAKER_00: interest rate cut at all is needed at the next Fed meeting in November.
• 2:56
  SPEAKER_00: We've come a long way from the assumption of a second consecutive half-point cut from a few weeks ago.
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  SPEAKER_00: Stocks generally liked what they saw and initially shifted higher,
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  SPEAKER_00: but enthusiasm was dampened a little by data showing that industrial production
• 3:12
  SPEAKER_00: fell by more than expected.
• 3:15
  SPEAKER_00: The indexes spent the day slowly drifting back lower again,
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  SPEAKER_00: finishing the session pretty much unchanged from where they opened.
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  SPEAKER_00: A Netflix earnings beat and very positive forward guidance from the previous
• 3:29
  SPEAKER_00: evening cheered the market on Friday morning,
• 3:33
  SPEAKER_00: with the stock surging 10% at the open.
• 3:36
  SPEAKER_00: Apple pitched in with its iPhone 16 launch apparently going down very well in China.
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  SPEAKER_00: Not such good news at CVS,
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  SPEAKER_00: who followed up their miserable earnings report by a C-suite shakeup and the stock
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  SPEAKER_00: spiraled markedly lower.
• 3:53
  SPEAKER_00: On a big picture level,
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  SPEAKER_00: however,
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  SPEAKER_00: the major indexes moved upwards,
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  SPEAKER_00: led by the Nasdaq,
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  SPEAKER_00: to achieve a sixth straight week of gains,
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  SPEAKER_00: the longest such streak of the year,
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  SPEAKER_00: and closing once again at new all-time record highs for the S&P 500 and the Dow
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  SPEAKER_00: Jones Industrial Average.
• 4:13
  SPEAKER_00: The S&P is closing in on 5,900 and it's obvious to anyone taking any notice that at
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  SPEAKER_00: that level,
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  SPEAKER_00: the market is making no allowance whatsoever for any kind of growth slowdown.
• 4:26
  SPEAKER_00: And to be fair,
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  SPEAKER_00: the economic data recently has been far better than expected and has strongly
• 4:31
  SPEAKER_00: supported this uber-optimism.
• 4:35
  SPEAKER_00: A soft landing remains by far the most likely outcome for the economy,
• 4:40
  SPEAKER_00: as important economic data has strengthened across multiple fronts over the last month.
• 4:46
  SPEAKER_00: It's not an exaggeration to say that this is as positive as the economy has looked all year.
• 4:52
  SPEAKER_00: What is of concern to some people is not so much that there is an increasing
• 4:57
  SPEAKER_00: likelihood of any upcoming growth disappointments,
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  SPEAKER_00: there isn't.
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  SPEAKER_00: but the extent of the damage that could be done to stock prices if such
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  SPEAKER_00: disappointments were to end up happening at some point,
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  SPEAKER_00: since the market is strongly assuming that they simply won't come to pass and is
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  SPEAKER_00: very much priced accordingly.
• 5:19
  SPEAKER_00: There is no buffer at all against evidence of any kind of growth setback.
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  SPEAKER_00: That's why each piece of major economic data needs to be closely watched.