Largest monthly gains for the S&P 500 and Nasdaq since November 2020
Even after digesting dismal results from industry titans Amazon.com Inc. and Apple Inc., U.S. stock indices closed October at all-time levels, recording weekly and monthly gains. According to Dow Jones Market Data, April was the best month for the S&P 500 and the Nasdaq Composite since November 2020.
Describe the behavior of major stock market indices.
- With this gain, the Dow Jones Industrial Average DJIA, 0.39% reached a new all-time high of 35,819.56.
- Finally closing at 4,605.38, the S&P 500 SPX, 0.37% up 8.96 points, or 0.2%.
- Nasdaq COMP, 0.16% finished at a record high of 15,498.39, up 50.27 points, or 0.3%.
The Dow Jones Industrial Average increased by 0.4%, the S&P 500 by 1.3%, and the Nasdaq Composite by 2.7% during the last week. For the month of October, the Dow rose 5.8 percent, the S&P 500 rose 6.9 percent, and the Nasdaq rose 7.3 percent.
Compared to the beginning of the year, the Dow is up 17.03%, the S&P 500 is up 22.61%, and the Nasdaq is up 20.25 %.
To what do you attribute the market’s performance?
The month of October ended on a high note for U.S. equities.
On Thursday, investors shrugged off a disappointing third-quarter economic growth report and drove the S&P 500 and the Nasdaq to record highs on the back of earnings news and hopes for a congressional spending deal. However, negative results from two major technology companies weighed on Friday’s action.
On Thursday night, Apple AAPL, -1.39% said that it had fallen short of Wall Street’s revenue projections for the first time since December of last year, due in large part to lower-than-anticipated demand for its iPhones and other wearable electronics. As it deals with supply-chain and employment concerns, Amazon.com (AMZN, -0.36%) has announced a nearly 50% reduction in profitability and issued a poor Christmas retail prediction. In Friday’s early afternoon trading, shares of both Amazon and Apple were down by more than 2%.
“Apple is having an influence on the S&P and Nasdaq today,” Katie Nixon, chief investment officer of Northern Trust Wealth Management, said in a phone interview on Friday. That’s a huge holding, man.
Despite starting the day in the red, both the S&P 500 and the Nasdaq managed to close the month and the week with gains.
Following Apple’s unusual sales shortfall because to supply difficulties, Microsoft MSFT, +2.24% became the most valued U.S. corporation, dethroning the smartphone titan.
Nixon said that she has a “positive” outlook on the equity market since the fundamentals of most firms are strong and they are meeting or exceeding third quarter earnings projections. Despite “notable failures” by Apple and Amazon, she added, the stocks market is obviously relishing earnings season.
Market watcher Jack Janasiewicz quoted the senior portfolio strategist at Natixis Investment Managers Solutions, who speculated that investors may have misjudged “the flexibility of corporate America” in dealing with supply-chain disruptions. He stated, “they’re really holding up fairly well,” despite the fact that Apple and Amazon stock prices were falling.
It’s my opinion that investors should seek further than Apple and Amazon for their next round of tech stock purchases.
As global debt yield curves flatten, traders have been factoring in their anticipation of tighter monetary policy from the Federal Reserve. Many anticipate the Federal Reserve will reveal a strategy next week to gradually reduce its monthly bond buying of $120 billion.
Find out why U.S. equities keep setting new highs even as the yield curve flattens.
President Christine Lagarde of the European Central Bank tried to counter surging market expectations for policy interest rate rises by the end of next year on Thursday, but her words were mostly ignored by the market.
Despite a rise in consumer expenditure of 0.6%, personal income in the United States fell by 1% in September, after a gain of 0.2% in August. The 0.4% drop in personal income and expenditure was in line with projections made by economists.
The final reading for October on the University of Michigan’s index of consumer sentiment was 71.7, up 0.3 points from the preliminary reading earlier this month but still below the final September level of 72.8.
“Growth is still humming along.”Janasiewicz said
I felt the market was going excessively pessimistic in early October.
Whose businesses were the main attraction?
- The energy giant Chevron Corp. CVX, 0.28% posted third-quarter earnings and sales that overwhelmingly above projections, on the back of increasing crude oil and natural gas prices, sending its stock price up 1.2%.
- After the disk drive and flash memory chip business issued dismal earnings projections, Western Digital Corp. WDC, 1.64% came under scrutiny. The stock price was down 8.7 percent.
- Investors were disappointed by Starbucks’ slowing sales growth in the fourth quarter, sending the company’s stock (SBUX, 0.61%) tumbling.
- After gaining 5% on Thursday due to Facebook Inc.’s FB statement that it was changing its name to Meta, shares of Nova Scotia-based material-science business Meta Materials Inc. MMAT, 2.43% increased approximately 3.1% on Friday.
- In the wake of the announcement that it would acquire Momentive Global Inc. MNTV, 1.42%, the parent company of online questionnaire platform SurveyMonkey for $4.13 billion in stock, shares of Zendesk Inc. ZEN, +0.03% fell by 14.5 percent. The stock price of Momentive Global fell by 8%.
Where do other assets stand in terms of trading?
- After seeing its worst daily loss since July 19 on Wednesday as front-end rates surged, flattening the yield curve, the yield on the 10-year Treasury note TMUBMUSD10Y decreased around 1 basis point on Friday, to 1.5555%. There is an inverse relationship between bond yields and their prices.
- The dollar appreciated by 0.8% versus a group of six major competitors tracked by the ICE U.S. Dollar Index DXY.
- The price of a barrel of oil increased by 0.9% on Friday, reaching $83.57, although it was still down 0.2% from the previous week. This was reflected in the US benchmark CL00. Gold futures GC00 decreased this week by 0.7%, closing at $1,783.90 per ounce on Friday.
- On Friday, European stocks finished 0.1% higher on the Stoxx Europe 600 index SXXP, +0.50%, capping a week in which the index gained 0.8% and a month in which it gained 4.6%. The FTSE 100 UKX, +0.33% in London fell 0.2% on Friday but gained 0.5% for the week and 2.1% for the month.
- Although it gained 0.8% on Friday, the Shanghai Composite SHCOMP, -0.33% was still down 1% for the week and down 0.6% for the month of October. On Friday, the Hang Seng Index HSI, -1.00% in Hong Kong fell 0.7%, bringing its weekly loss to 2.9% while the monthly gain remained at 3.3%. The Nikkei 225 in Japan (NIK, +2.31%) added 0.3% on Friday, for a 0.3% weekly gain but a 1.9% monthly loss.