Hope all is well with you and your family. Here’s our quick market update for May 28, 2024.
Mixed Up Markets
Major U.S. stock market indexes traded in a notably mixed fashion last week, before the Memorial Day Weekend. Tech provided leadership as industrials lagged.
Tallying last week, the S&P 500 was nearly flat, higher by , the Nasdaq 100 rose by an impressive , and the Dow Jones Industrial Average saw an even more impressive uptick of .
Higher for Longer — Still?
Midway through last week, we got the Fed minutes from the most recent policy meeting that concluded on May 1st. The that “various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”
With inflation still sticky, the Fed has telegraphed that further policy tightening could be appropriate should inflation risks materialize. “Participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2 percent objective,” their summary stated.
Deflating Sentiment
Given the recent stubborn and mixed inflation metrics from several data points, it is no surprise that consumer sentiment has shifted to the downside. Labor and inflation worries contributed to consumer sentiment dropping 10.5% in May, its lowest reading in almost five months, according to the released last Friday.
Consumer Sentiment Survey Director Joanne Hsu said, “Consumers expressed particular concern over labor markets; they expect unemployment rates to rise and income growth to slow,” Hsu wrote. “These deteriorating expectations suggest that multiple factors pose downside risk for consumer spending.”
Persistently elevated interest rates are also a factor for credit-hungry Americans absorbing “high” prices for many goods and services.
Oil Prices Slide 2%
Crude oil dropped last week, posting its biggest weekly drop in a month courtesy of interest rate woes. That sounds like good news heading into the summer driving season, historically known to kick off around Memorial Day.
The average price of regular unleaded gasoline was as of 05/27/24, according to AAA, showing some relief at the pump in many parts of the country but not everywhere.
On Monday, in quiet early week holiday trade, oil prices rose over , trading near $78.51 at the last check on Memorial Day. Oil has been quiet recently since tensions and fears in the Middle East have somewhat faded.
This week’s inflation data in the form of Core PCE will be watched closely for future price direction by oil traders and investors.
Inflation & GDP Data Incoming
It’s a holiday-shortened yet data-heavy week, with the biggie being Core Personal Consumption Expenditures (PCE) on Friday. Last month, the Fed’s preferred inflation gauge
showed an increase of month-over-month, and expectations are for a tick lower to a 0.2% month-over-month increase this time around.
Core PCE is an important metric right now, as the markets are looking for directional assurance on interest rates given the Fed’s recent hawkish tone.
There are a few others, too: consumer confidence on Tuesday to get things kicked off, weekly unemployment claims (last week’s was light, and markets liked it), then preliminary GDP and pending home sales on Thursday.
Key Takeaways
If inflation and elevated interest rates were to dictate the mindset of collective long-term investors, they would have missed out on some serious capital appreciation over the last two years — just look at the major stock market averages.
Fed Tone 180
Mixed messaging was the theme last week, as investors wonder if the Fed is doing a 180 on tone. The Fed’s intentions have been well-telegraphed, and Friday’s Core PCE will be what the market at large will look towards this week. After that, the next piece of data, and the next.
Rate Cut Probabilities
Of course, most asset classes and most investors want rate cuts, and as of last week’s market close, it looks like September is where the current probabilities are, with a 49.4% chance of a rate cut versus 10.2% in July, according to the
FOMO on the Bottom Line
As always, if there is anything on your mind regarding your investment portfolio, give me a call or . In the meantime, have a great week ahead as we officially head into Summer 2024.
Market Update Video
Market Update May 2024-Video
🎥 Market Update May 2024: Tech Gains, Inflation Concerns, and Oil Price Dynamics 📊
Welcome to our May 2024 Market Update! 🌟 This month, we’re diving into the mixed performance of major U.S. stock market indexes, the Fed’s stance on inflation, and the latest on consumer sentiment. Plus, we’ll cover the recent movements in oil prices and the crucial economic data releases to watch this week. 📈💡
🔍 Topics Covered:
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Mixed Market Performance 📉📈
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Fed’s Policy Outlook 💬📉
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Consumer Sentiment Drop 😟📉
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Oil Price Decline 🛢️⬇️
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Upcoming Inflation & GDP Data 📊📅
📊 Key Takeaways:
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Tech sector leads while industrials lag.
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Fed hints at further policy tightening.
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Consumer sentiment hits a five-month low.
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Oil prices drop, providing some relief at the pump.
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Critical economic data releases this week.
For detailed insights and analysis, watch the full video and stay updated with the latest market trends! 📽️💼
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🔔 Don’t forget to like, subscribe, and hit the notification bell to stay updated with our latest videos! 🛎️👍
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✨ Thanks for watching and have a great week ahead! 🌞
