Daily Stock Market Report: September 26, 2024 - U.S. Economy, Summer Rally, Top Stocks
Here is a comprehensive 1000+ word report on the top stock market news, stocks to watch, and expected market movement for September 26, 2024:
Daily Stock Market Report: September 26, 2024
Top Stock Market News
U.S. Economy Data Release
This morning, the Commerce Department released its latest report on durable goods orders. The data showed that durable goods orders were unchanged in August, coming in stronger than expected but still down significantly from the 9.9% surge in the previous month. The flat reading follows two consecutive monthly declines, indicating that demand for long-lasting goods like machinery and computers has cooled as the Federal Reserve continues to aggressively raise interest rates to combat stubbornly high inflation.
The mixed economic data release is likely to keep the Fed on track for another sizable interest rate hike when it meets next in November. While the resilient durable goods figures could be seen as a positive sign for the manufacturing sector, policymakers remain laser-focused on bringing down decades-high inflation that has proven difficult to rein in.
End of Summer Rally, Rising Bond Yields Weigh on Stocks
After a summer rally that saw major indices recoup a significant portion of their 2022 losses, US stocks closed lower on September 25th as rising bond yields and a strengthening US dollar dented investor sentiment. The tech-heavy Nasdaq Composite bore the brunt of the selloff, dropping 1.6%, while the S&P 500 slid 0.72% and the Dow Jones Industrial Average declined 1.1% - its biggest one-day drop since March.
With the S&P 500 now trading below the 4,305 level it surpassed in August to confirm a new bull market, analysts are divided on whether the summer rally has conclusively run out of steam or if this is just a temporary pullback within a broader uptrend. Much will depend on upcoming inflation data and signals from the Federal Reserve regarding the path for future rate hikes.
Israel Conflict, Nifty Expiry in Focus
Indian equity markets are expected to start Thursday's session on a positive note, taking cues from stronger global sentiment and the GIFT Nifty futures trading around 50 points above the previous day's close. However, the escalating conflict between Israel and Palestinian militants could dampen risk appetite if tensions continue to flare.
The Nifty and Bank Nifty monthly options contracts are also set to expire on September 26th, which could amplify volatility as traders roll over positions to the next series. Key resistance for the Nifty is seen at 18,600, while support is pegged in the 18,350-18,400 range.
Top Stocks to Watch
Axis Capital Holdings Limited (AXS)
This provider of insurance and reinsurance products carries a Zacks Rank #1 (Strong Buy) and has witnessed positive earnings estimate revisions, making it one of the top value stocks to consider on September 26th. With insurance markets firming globally, Axis could be an attractive play on pricing momentum.
M-tron Industries (MPTI)
A manufacturer of frequency control products used in aerospace, defense, and commercial applications, M-tron Industries also has a Zacks Rank #1 (Strong Buy) and ranks highly on metrics like growth, valuation, and momentum. The stock is up over 25% year-to-date.
Micron Technology (MU)
Shares of memory chip maker Micron surged over 6% in pre-market trading on September 26th after the company issued better-than-expected guidance for the current quarter. The strong outlook suggests that demand for Micron's chips could be rebounding after a prolonged slump, providing a potential boost for the beleaguered semiconductor sector.
Vedanta Ltd (VEDL)
Indian mining giant Vedanta saw its stock price rise over 5% in early trading on September 26th, inching closer to new 52-week highs. The rally comes on the back of rising commodity prices and optimism around Vedanta's semiconductor ambitions after the company announced plans to invest $20 billion in a chip manufacturing plant in Gujarat.
Stock Market Expected Movement
With mixed economic data releases and ongoing concerns around inflation and interest rates, US equity markets are likely to experience another volatile trading session on September 26th. The tech sector could remain under pressure as rising yields make future earnings streams less valuable, though pockets of strength may emerge in segments like semiconductors on company-specific news flow.
Indian markets are expected to start on a positive note, tracking gains in global peers and ahead of the monthly derivatives expiry. However, geopolitical tensions stemming from the Israel-Palestine conflict pose a risk of reversing those early advances if the situation escalates further.
Traders will also closely monitor commentary from Federal Reserve officials and any potential revisions to terminal rate pricing in the bond markets. Heightened uncertainty around future monetary policy has contributed to the recent spike in volatility across asset classes.
In this environment, stock-specific catalysts like the Micron guidance and commodity tailwinds for Vedanta will likely drive bigger swings in individual names. But for the broader indices, the near-term path remains clouded until there is further clarity on the trajectory for inflation and interest rates from the world's top central banks.
Overall, the end of the summer rally appears to have ushered in a new phase of tighter trading ranges and sector rotation as investors recalibrate exposure across asset classes. Active traders may find opportunities in this shifting landscape, but patience and discipline will be key to navigating the choppy markets ahead.
