Stock Market Analysis for October 31, 2024

Overview

As markets prepare to open this morning, investors are assessing the effects of major global events that have influenced market performance last week. The SPDR S&P 500 ETF (SPY) showed a slight increase of 0.5% through last week, closing at $420 per share. Meanwhile, the Nasdaq-100 ETF (QQQ) increased by 0.7% to close at $357.

Key Events Impacting the Market

1. Earnings Reports: Several key companies reported quarterly earnings last week, with tech giants including Apple and Amazon surpassing expectations, which positively impacted overall market sentiment.
2. Federal Reserve Updates: The Federal Reserve’s recent indications regarding interest rates and inflation expectations have kept investors cautious. With inflation remaining elevated, there’s speculation about potential rate hikes in 2025.
3. Geopolitical Tensions: Continuing geopolitical uncertainty, especially around Middle Eastern conflicts, has caused fluctuations in the energy sector, affecting overall market stability.

Events to Watch Next Week

• Non-Farm Payrolls (NFP) Report: To be released on Friday, this report is critical in gauging the health of the U.S. labor market and may further influence Fed policy.
• Inflation Data: The Consumer Price Index (CPI) is also scheduled for release, providing insights into ongoing inflation trends.
• Earnings Season Continues: Additional tech earnings from Alphabet and Meta Platforms may continue to sway market sentiment either positively or negatively.

Major News from the Last Week

• Utilities Sector Growth: More investors are turning towards utility ETFs like XLU after recent volatility in tech stocks, reflecting a shift to more stable investments.
• Oil Prices Surge: Driven by ongoing supply constraints, particularly in the Middle East, oil prices increased last week, which could impact sectors heavily reliant on energy.

Recommendations

• BUY: Consider adding to positions in SPDR S&P 500 ETF (SPY) and Vanguard Total Stock Market ETF (VTI) for diversified exposure as the market trends cautiously upwards.
• SELL: If you hold shares of JetBlue Airways Corp (JBLU), consider locking in profits. The airline sector remains highly volatile, and geopolitical instability could impact travel demand.
• Watch: Keep an eye on positions in technology sectors, especially individual stocks like Microsoft and Nvidia, as earnings reports may create volatility opportunities.

As the market opens, be ready for potential swings in stock prices prompted by the upcoming economic data releases.