S&P 500 Hits 42nd Record High Amid Broad Market Rally
S&P 500 Hits 42nd Record High Amid Broad Market Rally
By:JJ Kinahan
Plus, lower inflation supports the Fed’s flexibility, and Chinese stocks surged 16% because of the stimulus
The S&P 500 hit its 42nd record high as markets rallield
Core PCE data suggests inflation is under control.
Chinese stocks surged 16% after the country took economic stimulus measures.
Stocks closed higher yesterday, with the S&P 500 setting its 42nd new high of the year, gaining 0.4%. The Nasdaq Composite climbed 0.6%, while the Russell 2000 and Dow Jones Industrial Average added 0.5% and 0.6%, respectively.
Investors are watching closely as markets aim for their 43rd high, pending the release of the personal consumption expenditures (PCE) report.
The report, a key indicator of inflation, showed core PCE rising 0.1% month-over-month and 2.7% year-over-year. The lower-than-expected monthly increase suggests inflation is under control, potentially giving the Federal Reserve room for further interest rate cuts. Ahead of the report, predictions for a 25- or 50-basis-point (bps) cut in November remained unchanged.
Individual stocks
In news about individual stocks, Coinbase (COIN) surged 7%, largely driven by Bitcoin's rise. The cryptocurrency is approaching $65,000 after rebounding from a low of $45,000 in August. Micron (MU) also saw a significant jump of nearly 15% after reporting strong earnings, while Super Micro Computer (SMCI) shares fell 12% amid accounting fraud investigations.
Chinese stocks continued to rally, with the iShares China Large-Cap ETF rising 8% as the People’s Bank of China introduced more stimulus, including lower bank reserve requirements. Chinese equities are up 16% this week following those aggressive measures, though questions remain about the long-term impact of such interventions.
Costco (COST) shares were down 1.4% in premarket trading, despite beating revenue estimates. It was because of weaker-than-expected same-store sales. Meanwhile, DirectTV (DTV) and Dish (DISH) are in talks of a merger to regain potentially competitive pricing in a declining subscriber market.
A time to reflect
As volatility remains steady, many investors are opting for put options as protection, signaling caution. With upcoming employment data and the start of earnings season, it’s a good time for investors to reassess their positions.
JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan
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