A few Fed speeches and private sector activity data due on Monday will also be of interest to the market, which has had an atypically strong September. China followed up with more cuts on Monday as the country strives to bring the struggling economy back on track.

Futures Performance (+/-) Nasdaq 100 +0.24% S&P 500 +0.15% Dow +0.06% R2K +0.32%

In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY rose 0.15% to $569.09 and the Invesco QQQ ETF QQQ climbed 0.27% to $483.06, according to Benzinga Pro data.

Cues From Last Week:

U.S. stocks recorded gains for the second straight week as the Fed’s 50 basis-point cut set the market on fire, although a session after the announcement. After a mixed start to the week, positive retail sales generated buying interest in the market on Tuesday. Sentiment soured on Wednesday despite the initial positive reaction to the rate cut and the major indices closed lower.

Traders reacted with a lag to the rate cut, sending averages sharply higher on Thursday. The S&P 500 Index and the Dow Jones Industrial Average scaled record highs in the session. Caution returned on Friday as the market closed the triple-witching session on a mixed note. The Dow built on its gains on Friday and ended at a new high.

“This might be a September rally to remember on Wall Street, as history is not on the side of September delivering many market rallies,” said fund manager Louis Navellier.

Index Weekly

Performance (+/) Value Nasdaq Composite +1.50% 17,948.32 S&P 500 Index +1.36% 5,702.55 Dow Industrials +1.62% 42,063.36 Russell 2000 +2.08% 2,227.89

Insights From Analysts:

The atypical September rally points to more gains ahead before the year ends, says Carson Group’s Chief Market Strategist Ryan Detrick. A new high for the S&P 500 Index in September has meant an even better fourth quarter in the past, he said. The market has risen 19 out of 21 times and the average gain is nearly 5%, he said. If the new high was made in September, which also happens to be an election year, the fourth quarter is higher 100% of the time with an average gain of 6%.

When the S&P 500 makes a new high in September (like '24) it appears Q4 does even better.

In fact, higher 19 out of 21 times (90.4%) and up nearly 5% on avg.

New highs in Sept of election year? Q4 higher 6 out of 6 and up nearly 6% on avg. — Ryan Detrick, CMT (@RyanDetrick) September 22, 2024

The S&P 500 Index, which closed Friday’s session, just shy of an all-time high, is now above year-end price predictions of 70% of Wall Street analysts. This has rendered S&P valuation slightly higher than the average number for the past five and past 10 years, FactSet data showed.

JPMorgan Global Investment Strategist Sarah Stillpass said in a report the September rate cut could bode well for equities. Since 1980, five of the 10 best years for the S&P 500 happened when the Fed was cutting rates without a recession, she said. She also noted that the Fed has cut rates 12 times when the S&P 500 was within 1% of its all-time high such as the current year. The market was higher one year later all 12 times, with a median return of 15%, she added.

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Upcoming Economic Data:

A slew of Fed speeches and the core personal consumption expenditure index, which is part of the personal income and spending report, are the key data the market will likely look forward to in the unfolding week. Traders may also keep a close eye on the weekly jobless claims data, flash private sector activity readings from S&P Global, a consumer confidence reading, the August durables goods orders data and a couple of housing market readings.

On Monday, Atlanta Fed President Raphael Bostic is scheduled to speak at 8 a.m. EDT, followed by Chicago Fed President Austan Goolsbee at 10:15 a.m. EDT and Minneapolis Fed President Neel Kashkari at 1 p.m. EDT.

S&P Global will release its flash manufacturing and service sector purchasing managers’ indices for September at 9:45 a.m. EDT. Economists, on average, expect the manufacturing purchasing managers’ index to rise from 47.9 in August to 48.4 in September, suggesting the sector continued to contract. The service sector PMI is widely expected to hold steady at 55.4 compared to August’s 55.7.

The Treasury will auction three- and six-month notes at 11:30 a.m. EDT.

Stocks In Focus:

Intel rose about 3% in premarket trading amid reports that Apollo Global Management seeks to invest $5 billion in the chipmaker in return for an equity stake in the company. Incidentally, Qualcomm, Inc. QCOM is rumored to be interested in buying Intel.

rose about 3% in premarket trading amid reports that seeks to invest $5 billion in the chipmaker in return for an equity stake in the company. Incidentally, is rumored to be interested in buying Intel. Bitcoin’s BTC/USD rally is sending crypto-linked stocks higher on Monday.

rally is sending crypto-linked stocks higher on Monday. Palantir Technologies, Inc. PLTR fell over 1.60% following a negative analyst action. The company will be added to the S&P 500 Index, along with Dell Technologies Inc. DELL and Erie Indemnity Company ERIE .

fell over 1.60% following a negative analyst action. The company will be added to the S&P 500 Index, along with and . AAR Corp. AIR is due to announce its quarterly results after the market closes.

Commodities, Bonds And Global Equity Markets:

Crude oil and gold futures are modestly higher, with the latter trading near record territory. Bitcoin has gone past the $63.5K level. The 10-year Treasury note yield rose 1.1 points to 3.739%.

The Asian markets closed on a lackluster note, although the Japanese market remained closed for a public holiday. The People’s Bank of China announced a cut to its 14-day reverse repurchase rate, following up with the downward adjustments that began in July. Chinese central bank governor Pan Gongsheng will hold a press conference Tuesday on financial support for economic development, alongside two other officials, Bloomberg reported.

European stocks also showed tentativeness as domestic traders digested weak private sector activity data from the region.

Photo via Shutterstock

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