Third Week of September 2024

THE WELL-TH NOTES

Weekly data-driven insights on the markets and economy

1. The Cuts Have Arrived

The Fed conducted rate cuts this Wednesday by half a point, the first time since March 2020. This lowers the federal funds rate to 4.75%-5%. The vote came down to an 11-1 tally as Governor Michelle Bowman put her bid in for a quarter point cut.[i]

2. Markets Respond to the Fed

At the halfway point of this week, stocks saw some heavy fluctuation following the Federal Reserve’s interest rate cut. The Dow, S&P 500 and Nasdaq all saw some initial growth, ultimately to each fall by about 0.3% respectively.[ii]

3. End of an Era?

It’s looking like the times of 5% money market fund yields are coming to an end. The yields on the $6.3 trillion in assets in these money market funds are predicted to have strong drop off. The 2-year Treasury yield, which was up to 5% this year, already dropped down to 3.59%.[iii]

4. Going for Gold

Since January 1, the price of gold has grown by 25%, compared to the mean stock market return of roughly 10% over that period. Gold is becoming a strong growth investment rather than just a safer long-term investment.[iv]

5. Pay for the People

Amazon has said this month it will be raising the wages of the company’s fulfillment and transportation staff in the US by at least $1.50 an hour, in addition to granting these employees free Prime memberships as an added benefit. The company will spend upwards of $2.2 billion on these enhancements to benefits.[v]

6. Talent Fee?

The University of Tennessee will be boosting ticket prices by 10% for all sports as part of its preparation for athletes beginning to get a piece of the revenue generated from school sports. Newly named the “talent fee,” many wonder if this will become the new norm for schools in this unchartered territory that is college sports. [vi]

[i] Cox, Jef, “Fed slashes interest rates by a half point, an aggressive start to its first easing campaign in four years,” CNBC, September 18, 2024, https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html. Accessed September 18, 2024.

[ii] Mena, Bryan, Buchwald, Elisabeth and Hur, Krystal, “Jumbo-size rate cut: Fed slashes rates by a half percentage point,” CNN Business, September 18, 2024, https://www.cnn.com/business/live-news/federal-reserve-interest-rate-09-18-24/index.html. Accessed September 18, 2024.

[iii] Mercado, Darla, “The Fed is preparing to cut interest rates. How to revamp your fixed income investments,” CNBC, September 18, 2024, https://www.cnbc.com/2024/09/17/the-fed-will-soon-cut-rates-how-to-revamp-fixed-income-investments.html. Accessed September 18, 2024.

[iv] Leicht, Angelica, “Gold prices surge to a new record: Why investors are buying in,” CBS NEWS, September 16, 2024, https://www.cbsnews.com/news/gold-prices-surge-to-a-new-record-why-investors-are-buying-in/. Accessed September 18, 2024.

[v] “Amazon raises pay of US hourly workers in fulfillment, transport ops,” Yahoo!finance, September 18, 2024, https://finance.yahoo.com/news/amazon-raises-pay-hourly-workers-151026722.html. Accessed September 18, 2024.

[vi] Piazza, Jake, “University of Tennessee to raise season ticket prices 10% in anticipation of revenue sharing,” CNBC, September 18, 2024, https://www.cnbc.com/2024/09/18/tennessee-to-raise-season-ticket-prices-10percent-for-revenue-sharing.html. Accessed September 18, 2024.

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Third Week of September 2024

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