The S&P 500 Index gained for the sixth straight week, marking the longest winning streak of the year.1 Investment-grade spreads are nearing the tightest levels of the last 25 years that were set in 2005; however, all-in yields look more attractive relative to recent history.2 The two big stories this morning are coming out of China and Boeing. China unveiled additional stimulus, announcing some of its biggest cuts to benchmark lending rates in years.3 Boeing reached a tentative strike settlement with the union over the weekend, with a vote expected later this week.4 Also, the German Producer Price Index (PPI) declined more than expected, which is increasing European Central Bank (ECB) rate cut expectations.5
This week, we will keep a close eye on earnings — as more than a fifth of S&P 500 Index companies are expected to report this week — and economic releases.6 Existing home sales data is due Wednesday, initial jobless claims will be reported Thursday, along with S&P Global U.S. Purchasing Managers' Index (PMI) and new home sales.7 On Friday, the University of Michigan sentiment reports will be released.8 Inflation expectations will be closely watched this week as markets continue to seek reinforcing data of the Goldilocks scenario being priced in currently.
Sources:
1,2Bloomberg
3Financial Times – China cuts interest rates in battle to hit year-end growth target; 10/21/24
4Investor’s Business Daily – Boeing Rebounds On Contract Hopes, Faces Triple-Digit Earnings Views; 10/21/24
5FX Street – EUR/GBP remains below 0.8350 following Germany PPI data; 10/21/24
6Bloomberg – S&P Futures Drop as Busy Earnings Week Kicks Off: Markets Wrap; 10/21/24
7,8MarketWatch – U.S. Economic Calendar; as of 10/21/24
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