PAS Weekly Commentary

S&P 500, DJIA at New All-time Highs After Winning Week

The stock market closed out another winning week with the S&P 500 and Dow Jones Industrial Average at fresh record highs.

The Russell 2000 (1.9%) pacing index gains, the S&P 500 settled 0.9% higher, the Nasdaq Composite jumped 0.8%, and the Dow Jones Industrial Average rose 1.0%.

Gains were relatively broad based, driven by ongoing momentum as stocks continue to hit new record highs. The equal-weighted S&P 500 settled 1.1% higher than last Friday.

Semiconductor stocks were a pocket of weakness in a mostly upbeat tape. The PHLX Semiconductor Index (SOX) dropped 2.4% this week in response to a Bloomberg report that the Biden administration is looking at curbing sales of advanced AI chips to certain countries, with a focus on Persian Gulf countries, and in response to ASML's (ASML) Q3 results.

The semiconductor equipment maker's results were released early and disappointed investors due to below‐consensus EPS, revenues, and net bookings. The company also issued weaker-than-expected FY25 revenue guidance saying, "While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover."

Taiwan Semiconductor Manufacturing Company (TSM) reported pleasing Q3 results, along with better-than-expected Q4 guidance, which stirred some buy-the-dip interest in the space by the end of the week.

A lot of the earnings news this week was well received, contributing to the overall positive bias. Dow component UnitedHealth (UNH) was an exception, registering a sharp decline after reporting its third quarter earnings, which featured an increase in its medical care ratio, and issuing some tepid FY25 earnings guidance.

This price action impacted the S&P 500 health care sector's performance. It was one of two sectors to close lower this week. The only other sector to log a decline was energy (-2.6%), which was reacting to a drop in oil prices. WTI crude oil futures settled Friday at $68.62/bbl.

The financial sector was a top performer as investors digested a slate of earnings news from the space. Morgan Stanley (MS) and Goldman Sachs (GS) were some of the standouts in that respect.

Market participants were also weighing the notion that the Fed won't be as aggressive as previously thought after more solid economic data. This week's releases included September retail sales, which were stronger than expected, and initial jobless claims, which were not as bad as feared.

  • Nasdaq Composite: +0.8% for the week / +23.2% YTD
  • S&P 500: +0.9% for the week / +23.0% YTD
  • Dow Jones Industrial Average: +1.0% for the week / +14.8% YTD
  • S&P Midcap 400: +1.4% for the week / +15.0% YTD
  • Russell 2000: +1.9% for the week / +12.3% YTD

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Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Data and rates used were indicative of market conditions as of the date shown and compiled by Briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

Park Avenue Securities LLC (PAS) is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker/dealer offering competitive investment products, as well as a registered investment advisor offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC.

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6974283.8 (Exp. 01/26)

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