In todays episode of Market Domination Overtime, hosts Josh Lipton and Julie Hyman delve into the most prominent dynamics leading stocks and the US housing market. US equities, including major indexes such as the Dow Jones Industrial Average, Nasdaq, and S&P 500, rebounded following a rough day for Big Tech stocks. Paul Hickey of Bespoke Investment Group joined the conversation to discuss the rubber band dynamic within markets.
Mortgage rates are on the decline, potentially opening the door for new homebuyers. Zillow senior economist Orphe Divounguy joined to discuss housing affordability and the best markets for buyers. As the closing bell rang on Wall Street, the Dow finished higher by nearly 250 points, or 0.6%, with the S&P 500 up 0.5%, and the Nasdaq rising by 0.6%. Despite recent rotations in the market, broad-based gains are still evident, particularly in the small-cap sectors, which continue to outperform the broader market.
Josh and the team explored a significant uptick in the Russell 2000, which rose by 6.19% for the week, driven by a substantial surge on Thursday. Consumer discretionary sectors rebounded after a drop, with a notable performance in the technology and materials sectors. The Nasdaq 100 presented a far better picture than the previous day, despite slight losses in some tech giants. Stocks like Meta experienced a nearly 3% drop, while NVIDIA gained 1.5% and Apple climbed over 1%.
Leading the way for the day were sectors like solar energy and disruptive small tech companies, and there was a strong performance in home builders, driven by decreasing interest rates. Notably, the ARK Innovation Fund, which focuses on small tech companies like Tesla and Roblox, showcased substantial gains.
Paul Hickey emphasized that while this market remains complex and volatile, with small caps and equal-weighted indexes seeing significant performances, investors might be better served focusing on smaller names within the broader market.
President Biden attempted to direct attention to his economic record during a recent news conference. Despite boasting endorsements from 16 economic Nobel Laureates for his economic initiatives, concerns about his age and ability to serve another term were evident after a blunder where he mistakenly referred to Vice President Kamala Harris as Vice President Trump. Yahoo Finances commentary noted that while Biden has always had slip-ups, his frequent errors at 81 years old far overshadow economic successes, such as promising inflation rates below 3%.
Analyst Rick Newman pointed out that Biden needs to be visibly active, engaging with the public through live events to demonstrate his capability despite his age. While Biden showed prowess on topics like international alliances, proving his mental agility and vigor remains crucial for his campaign.
Concerning mortgage rates, Zillows senior economist Orphe Divounguy noted that while affordability remains a challenge, the recent decline in rates could provide relief. Inventory for sale has increased by 23% compared to last year, which might put downward pressure on home prices. Areas like Texas and Florida, particularly Austin and Houston, were highlighted for their affordability and increased housing inventory, making them attractive to potential homebuyers.
Next week marks a busy period for earnings reports, with Morgan Stanley, Bank of America, and Goldman Sachs set to release their figures. Additionally, companies like United Health Group, Netflix, and United Airlines will report their earnings. Netflix, in particular, is expected to show strong subscription growth.
On the economic calendar, monthly retail sales data is set to be released, with economists forecasting a slight decline. Housing data, including housing starts and building permits, will also be closely watched.
Finally, the US Postal Service will increase the price of postage stamps from 68 cents to 73 cents, a reflection of the decreasing volume of first-class mail. The price hike will take effect on Sunday, so it might be a good time to stock up on forever stamps while they are still at the current price.
With these developments, Market Domination Overtime continues to provide comprehensive coverage of key market dynamics and economic trends.
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