Weekly Review for week ending 6-14-24
Last week, both the S&P 500 and NASDAQ posted gains, with both indexes pushing to new all-time highs. The S&P 500 added 1.6%, while the NASDAQ led with a significant 3.3% gain (FactSet). While small-cap stocks have been lagging this year, I’m optimistic they will catch up when interest rates begin to come down.
In economic news, consumer prices (inflation) increased by less than expected in May. The May CPI release is very encouraging for the Federal Reserve and promises even better news for the PCE price index, which will be released at the end of the month. The CPI for April was 3.5%, and economists expected it to cool to 3.4%, but it actually cooled further to 3.3%. This is positive movement in the right direction, though the Fed will want to see this pattern continue in next month’s report as well.
The Producer Price Index (PPI) which measures the average change in prices that domestic producers receive for their goods and services, indicating inflation at the wholesale level, was also lower than expected in May. This adds further evidence of an improvement in inflation and helps explain the weaker-than-expected CPI release from yesterday. The largest contributors to the decline in the PPI were energy prices, transportation and warehousing prices, and to a lesser extent, food prices.
Looking Ahead
The Federal Reserve met last week and decided to hold interest rates steady. However, Jerome Powell noted that the CPI data was better than expected and that moderate progress is being made. He confirmed that they expect one rate cut this year, four next year, and four the following year. While everyone on the street already anticipated this, it's reassuring to have confirmation.
As always, if you have any concerns or questions, feel free to reach out to me by phone or email. I'm here to help!
Jeremy Raffer, MBA
Director & Wealth Manager
Author “Financial Planning for Widows”
m. 201-747-2705
e. jeremy.raffer@stewardpartners.com
Steward Partners
115 W. Century Rd, Suite 145
Paramus, NJ 07652
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