Calm Before the Calm??? | June 14, 2024

Markets climbed nicely this last week. Is this the calm before the storm?

Monday                       S&P 500 0.26%| NASDAQ 0.35%

It was a rather muted start to the week. There was little to no economic data released and the markets were looking ahead to a busy week of information. We will be getting plenty of indications around inflation throughout the week along with the Federal Reserve Board (FRB) meeting. This should lend to a busy back half of the week.

Tuesday                       S&P 500 0.27% | NASDAQ 0.88%

Small business optimism improved more than expected, rising to 90.5. 10-year treasury auction showed more strength than expected. The improvement on rates may be a vote of confidence that the FRB meeting should show a more dovish tone.

Wednesday                 S&P 500 0.85% | NASDAQ 1.53%

The Consumer Price Index (CPI) drove market production on the day. The key inflation data point showed progress towards the 2% target, coming in at 3.3% (YoY) for May. The FRB left rates unchanged. The inflation data early in the day led to market gains that were sustained through the FRB results. Typically, the FRB has the ability to sway markets aggressively, that did not happen this time. Their tone was notably more hawkish, but no more than investors had expected.

Thursday                     S&P 500 0.23% | NASDAQ 0.34%

Initial jobless claims firmed to 242K from 229K. The Producer Price Index (PPI) also showed inflationary softening. This is a positive for future inflation expectations, which led to an up day for markets. Truly still riding the results from Wednesday’s news cycle.

Friday                          S&P 500 0.04% | NASDAQ 0.12%

Consumer Sentiment is projected to soften for June into the 60’s. May ran at 72.5. The market softness on Friday was likely due to a stronger dollar as Europe struggled for the week.

Conclusion                  S&P 500 1.58% | NASDAQ 3.24%

The gains for the week were above 1%, but the ride getting there was not a wild one. The more muted day-to-day of markets are welcome, as it should bring more stability through the summer. VIX, a measure of market volatility, came in at 12.5 for the week, a very low reading. Baring geo-political turmoil, this should spell calm for the summer months.

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