Happy Friday, October 4th!
Strong jobs data pushes stocks higher, election outcome scenarios and industry correlations, high school seniors focus on Southern colleges, surprise gifts for moms and meet the newest member of DSG Capital Advisors!
#1 – Weekly Market Summary
Stock markets slipped modestly over the course of the week as escalating geopolitical tensions combined with the anticipated jobs data paused investor confidence.
Through market close on Thursday, the S&P 500 and the Dow Jones were down a modest -0.7%, while the Nasdaq slipped -1.1%.
The S&P 500 closed at all-time highs Monday, but news of escalating turmoil in the Middle East caused stocks to retreat Tuesday.
With a prevailing sense of caution, most assets remained within a fairly narrow trading range except oil prices and Chinese stocks. Oil jumped +$5 to $74 per barrel on rising geopolitical tensions. Chinese stocks continued to build on last week’s rally following stimulative efforts from the Chinese government.
Stronger than expected jobs data this morning provided a further upward catalyst for stocks. The US added 254,000 jobs in September, far outpacing the expectation for 150,000 new jobs. The unemployment rate dipped to 4.1% as the economy appears to continue momentum following the Federal Reserve’s first rate cut in four years.
With the Federal Reserve’s next meeting just over one month away, continued signs of a growing economy combined with growing demand for jobs could cause the Federal Reserve to cut rates a modest 0.25%.
#2 - Election Outcomes and Industry Correlations
With the election just over a month away, DSG Capital Advisors has spent a significant amount of time analyzing data to provide insights on how different election outcomes could impact various industries.
The tables below identify four distinct election outcomes and the industries that have demonstrated a statistically significant correlation to the probabilities of each outcome.
The first table below summarizes industries that have been positively and negatively correlated to the odds of Kamala Harris winning the Presidential election. Each column further summarizes the industries that are positively and negatively correlated to Harris winning the Presidency with a divided Congress (first column) or in with a Democratic sweep (second column).
For instance, our research indicates that if Harris wins the Presidency, but the House and Senate are divided, then Semiconductor, Apparel, Renewable Energy, Residential REITs and Homebuilders could benefit. However, Pharmaceutical companies and Banks could come under pressure.
Interestingly, our research indicates that some industries such as Semiconductors, Apparel and Renewable Energy only need Harris to win the Presidency to potentially benefit, while others like Residential REITs and Homebuilders could require Harris to win plus a divided government to benefit.
Based on our research, we would anticipate Pharmaceuticals and Banks to come under pressure if Harris wins the Presidency; Health Care Equipment, Telecomm and Biotech could come under pressure if Harris wins and the elections result in a blue sweep.
The table below provides an overview of the industries that could have support, or come under pressure, if Trump wins the Presidency. For instance, the data indicates that Banks could do well if Trump wins the Presidency, while Transportation, Hotels, Health Care Equipment and Airlines could do well if there is a red sweep.
It appears that the apparel industry could come under pressure if Trump wins the Presidency while Renewable Energy, Insurance and Beverage companies could suffer under a red sweep.
At DSG Capital Advisors, we are using the data to determine potential areas of both opportunity and concern based on the probabilities of various election outcomes. We will continue to update this data as we move towards election night!
#3 - Heading South for College
A growing number of high-school seniors in the North are making an unexpected choice for college: They are heading to Clemson, Georgia Tech, South Carolina, Alabama and other Southern Universities.
Students say they are searching for the fun and school spirit emanating from the South on their social media feeds. Their parents cite lower tuition, less debt, and warmer weather. According to figures from roughly 100 of the nation's top public research universities, Southern schools reported the lowest tuition of top public colleges in any region for out-of-state students.
College counselors report that many teens are eager to trade the political polarization at New England and New York campuses for the sense of community epitomized by the South’s football Saturdays.
A Wall Street Journal analysis of the latest available Education Department data found that the number of Northerners going to Southern public schools went up 84% over the past two decades, jumping 30% from 2018 to 2022.
In addition to Saturday’s football bonanzas, Southern college campuses typically have vibrant Greek fraternity and sorority life—all documented by undergrads on Instagram and TikTok. Every Saturday, thousands of students attend tailgate parties and football games across the South. By contrast, television news showed campuses beset by protests at many Northern schools last year. College counselors say this juxtaposition is one reason the flow of Northerners heading South could continue in the coming years.
This flow of students to Southern colleges promises to impact the region’s economy for years to come. About two-thirds of college graduates go on to work in the same state where they graduated, report researchers at the University of North Carolina-Chapel Hill and others. The transplants are well-educated, motivated young workers at the least expensive points in their careers.
It will be interesting to watch how businesses and universities adapt to this new trend.
Source:Wall Street Journal
#4 - Moms Gifting Moms
What began as one mom leaving a gift card attached to a package of diapers has become a viral social media trend.
A Nashville mom, Denaesha Gonzalez, was recently at Target shopping for her baby and saw a strange sight—a silver clutch purse sitting on a shelf next to the baby supplies. The $20 purse, she reasoned, had likely been picked out by a mother, who then gave it up to provide for her child.
Gonzalez posted a video describing this sight on her TikTok account, which later went viral. In the video, there is a heavy sigh followed by the caption: “She Deserved the Purse…To the Mother who chose themselves last, you deserve the world tonight and always.”
The video went mega-viral, meaning it was viewed by tens of millions of people, launching a nationwide campaign labeled #shedeservedthepurse challenge.
Women have been recording themselves buying gift cards, writing inspirational notes to mothers, and stashing them in boxes of diapers and other baby products for lucky, hardworking moms to find.
The Washington Post reports that over 150 videos have been posted on TikTok under the hashtag #shedeservedthepurse, featuring women leaving thoughtful gifts or finding gift cards and recording a teary-eyed thank you.
One stay-at-home mom told the Washington Post the videos affected her deeply. “Social media was always an aspirational place where people weren’t really showing the truth,” she said. “I think recently, as we all start to show more of the truth, it makes motherhood feel so much less alone.”
Source: Good News Network
#5 - Welcome Kayla
Kayla Siegel has joined the DSG Capital Advisors team! She is our newest Client Operations Analyst and will be supporting the operations team.
Kayla comes to DSG Capital Advisors as a recent graduate from the University of Minnesota Carlson School of Management in May 2024. She graduated with a major in Entrepreneurial Management and a minor in Marketing. She has a background in marketing development, CRM management, client acquisition, and daily operations.
Kayla has experience at both large and small market firms. We are excited about her energy and skillset including data interpretation, outreach, CRM integration, SEO work, and project execution.
Kayla lives in the West End area of Minneapolis. She enjoys long walks with dogs, hiking, wake surfing, playing tennis, and watching movies and shows with friends.
Have a Great Weekend!
Denver & the DSGCA Team