The S&P 500 showed a 4.50% increase last week, bringing its year-to-date return to 17.85% as of August 19th, ’24. However, this is still below the year-to-date weekly close high of 18.57% seen on July 12th, ’24.
Notably, the S&P 500 crossed above its 50-day moving average on August 14th, while the Nasdaq settled just above its 50-day moving average on August 16th, indicating that the tech sector is slightly trailing behind.
The 60/40 balanced portfolio also hit a new high in 2024 with a year-to-date return of 17.36% as of August 16th, compared to the previous high of 18.57% on July 12th. The bond market has contributed to the portfolio’s performance, with YTD returns higher as of August 16th compared to July 12th.
International markets saw positive movement last week, possibly due to the weakening dollar, as indicated by the UUP.
S&P 500 Data:
- The forward 4-quarter estimate dropped to $258.31 from the previous week’s $258.77 and the initial print in July ’24 of $261.39.
- The PE ratio on the forward estimate is now 21.5x, up from 20.6x last week.
- The S&P 500 earnings yield decreased to 4.65% from 4.84% the previous week.
- The EPS “upside surprise” remains lower than previous quarters at +4.5%.
- High-yield credit spreads are near +346, up from the lows of +310 in late July ’24, with positive YTD returns.
Expectations for tech sector earnings growth have remained stable for 2024 but show an increase for 2025, signaling potential growth opportunities in the sector.
While concerns around currency issues may seem overblown, history has shown that unexpected currency fluctuations can have a significant impact on markets. Monitoring the yen’s performance is crucial, as a strengthening yen could pose challenges for Japan’s economy.
It’s essential to remain cautious and vigilant in the face of market uncertainties. Past performance is not indicative of future results, and investing carries risks. Readers should assess their risk tolerance and adjust their portfolios accordingly.
Thank you for reading.