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01/07/24 Half Yearly Round-up

Wall Street closed lower on Friday, weighed down by tech and discretionary stocks. Political uncertainty also took centerstage after the first Presidential debate. All of the three major stock indexes ended in the red.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) slid 41.12 points, or 0.1%, to close at 39,122.94. Sixteen components of the 30-stock index ended in negative territory, while 14 ended in positive.

The tech-heavy Nasdaq Composite lost 126.08 points, or 0.7%, to close at 17,732.60.

The S&P 500 declined 22.57 points, or 0.4%, to close at 5460.30. Seven of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) lost 1.1%, 1.1% and 0.9%, respectively, while the Real Estate Select Sector SPDR (XLRE) rose 0.8%.

The fear-gauge CBOE Volatility Index (VIX) increased 1.6% to 12.44. Advancers outnumbered decliners by a 1.29-to-1 ratio on the NYSE.

Political Uncertainty Takes Centerstage

Encouraging PCE inflation numbers from the previous session did not lift investor mood on Friday, with the general consensus being that the Fed was unflinching from its target of bringing down inflation to 2%. On the contrary, the first Presidential debate between Joe Biden and Donald Trump led to some murmers in the stock markets.

The performance of the aging incumbent and claims made by the former President were both scrutinized, not necessarily in a good light. Also, regardless of what the political ramifications of the event are, the general investor mood was grim after the event. If something does not change drastically between now and election day in November, politics might continue to dominate headlines in the stock market.

Mega-cap growth stocks like tech usually do well when inflation seems to be coming down and the outlook looks better. However, as a result of the debate, tech and discretionaries led the day’s losses. Consequently, shares of Meta Platforms, Inc. META and The Walt Disney Company DIS slid 3% and 2.8%, respectively.

Weekly Roundup

Two of the three benchmark indexes closed a losing week amid sectoral corrections, uncertainty about the political climate and the Fed’s monetary policy. Both the S&P 500 and the Dow Jones Industrial Average closed 0.1% in the red, while the Nasdaq Composite bucked the trend by rising 0.2%.

Monthly Roundup

For the month, all three benchmark indexes posted gains. The tech-heavy Nasdaq Composite, the S&P 500 and the Dow Jones Industrial Average jumped 6%, 3.5% and 1.1%, respectively, in June, which was marked by a broad consensus that inflation was finally being reined in.

Quarterly Roundup

The S&P 500 and the Nasdaq registered quarterly gains of 3.9% and 8.3%, respectively. The Dow Jones, however, dropped 1.7%, proving the current primacy of tech-based indexes.

Half-Yearly Roundup

Nasdaq and S&P 500 have had a stellar first half of the year, rising 18.1% and 14.5%, respectively. The tech-light Dow Jones index gained 3.8% in the period.

Economic Data

Per a report from the University of Michigan, consumer sentiment for June was revised to 68.2 from the previously reported 65.6. While it is still less than the May number, it beat the consensus estimate of 66.

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