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Weekly NewsletterNovember 4, 2024

This Week on Wall Street – Week of November 4th

We kicked off the week with a rebound in stocks, fueled by dip-buying after last week’s sell-off.

This Week on Wall Street – Week of November 4th

Market Commentary

It’s election week in the United States, and markets appear to be in a holding pattern as they await election results, as the S&P 500 traded slightly lower on relatively thin volume. The finish line of this political race, along with the FOMC interest rate decision on Thursday, are likely to turn this uneventful Monday into an at least interest trading week. 

The market breadth that powered the summer rally in equities is waning, even as major indexes remain steady, supported by mega-cap leaders like NVIDIA and Meta. From a technical perspective, U.S. equities appear to be taking a breather, retreating to their medium-term moving averages after an impressive six-week run. With the election approaching, volatility is likely to increase throughout the week. 

Earnings season enters its fourth quarter this week, with results so far reflecting stable, not stellar, performance. To date, 70% of the S&P 500 has reported, with 75% surpassing earnings expectations and 60% exceeding revenue expectations. While these figures don’t raise major concerns, they both fall slightly below the five-year averages. If this trend continues, a 5.1% year-over-year growth rate could mark the fifth consecutive quarter of positive earnings growth. Overall, while growth is slowing, there are no significant signs of earnings instability at this point. 

On the economic front, all eyes are on Thursday’s Federal Reserve meeting and Jerome Powell’s press conference. Markets are highly confident of a 0.25% rate cut, with a 98% probability currently priced in. However, Powell’s remarks will be closely scrutinized. Some analysts suggest the Fed may have erred with its 50-basis-point cut in September and view the current rate-cutting cycle as premature, while others argue that further cuts are necessary to support a potentially vulnerable economy. How the Chairman and the committee navigate this balance will surely impact market sentiment moving forward. 

Our Newton model reflects the recent softening in equity market indexes. Although foreign stocks saw a slight improvement, momentum across the rest of the market either declined or remained steady over the past week. In terms of market segments, all areas lost favorability within our models. The bright spot was in fixed income, where falling market interest rates led to improved momentum for bonds. 

Economic Releases This Week

Tuesday: ISM Services 

Wednesday: S&P Services PMI

Thursday: Initial Jobless Claims, FOMC Interest Rate Decision & Press Conference

Friday: Consumer Sentiment

Stories to Start the Week

Restaurant chain TGI Friday’s filed for Chapter 11 bankruptcy citing an inability to recover from the Covid-19 pandemic as the primary cause

After rejecting the previous three offers from Boeing, 33,000 on-strike machinists will vote on the company’s latest attempt to end the seven-week walkout 

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What is Newton?

Our Newton model attempts to determine the highest probability of future price direction by using advanced algorithmic and high-order mathematical techniques on the current market environment to identify trends in underlying security prices. The Newton model scores securities over multiple time periods on a scale of 0-20 with 0 being the worst and 20 being the best possible score.

Trend & level both matter. For example, a name that moves from an 18 to a 16 would signal a strong level yet slight exhaustion in the trend.

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Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry and sector performance.

About This Series

Last Week on Wall Street

Last Week on Wall Street is Waterloo Capital's weekly market recap, published every Monday morning to keep advisors and clients informed on the most significant developments from the prior trading week. Each edition synthesizes equity market performance, fixed income moves, macroeconomic data releases, and notable corporate earnings into a concise, actionable read — cutting through the noise so our readers can focus on what actually matters for long-term wealth management.

Our research team tracks the S&P 500, Dow Jones Industrial Average, NASDAQ Composite, and 10-year Treasury yield as primary benchmarks, while also covering sector rotations, commodity swings, and policy shifts from the Federal Reserve and Washington. When major cross-asset moves occur — such as the historic gold selloff covered in this edition — we dig into the mechanics and the likely ripple effects on diversified portfolios, helping clients contextualize volatility without reacting impulsively.

Our Research Approach

Evidence-Based Perspective for Long-Term Investors

Waterloo Capital's investment research is grounded in fundamental analysis and long-term thinking. We believe that disciplined, evidence-based investing — anchored in each client's specific goals, risk tolerance, and time horizon — consistently outperforms reactive decision-making driven by short-term headlines. Our weekly commentary is designed to inform, not alarm: we put market moves in their proper historical context so that clients can hold conviction in their financial plans through periods of uncertainty.

As an SEC-registered investment advisor headquartered in Austin, Texas, with offices across the Southwest and Southeast, Waterloo Capital serves high-net-worth individuals, families, and institutions. Our advisors use proprietary research like this weekly recap as one input among many — alongside in-depth portfolio reviews, tax planning, and estate strategy — to deliver comprehensive wealth management tailored to each client relationship. To learn more about how our investment philosophy and ongoing market research can serve your financial future, contact our team directly.

Investment Disclosure: The information contained in this article is provided for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal. Waterloo Capital, LP is an SEC-registered investment advisor. Registration does not imply a certain level of skill or training. Please consult with a qualified financial professional before making any investment decisions.

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