Expect Volatility? | June 28, 2024

Markets were moving all over last week and thankfully landed in the green. Should this volatility be expected going forward?

Monday                       S&P 500 0.31%| NASDAQ 1.09%

With very little data on the day, tech stocks continued their slide from the prior week. Much of the data out this week is ancillary and should not be a major driver to rate expectations. To the contrary, Friday’s Personal Consumption Expenditures (PCE) index will be closely watched.

Tuesday                       S&P 500 0.39% | NASDAQ 1.25%

Home prices slipped in April, meanwhile CB Consumer confidence beat expectations. The rally on the day was centered around tech stocks. This is not surprising as they have been battered over the last several sessions. Outside of tech, the markets were fairly weak.

Wednesday                 S&P 500 0.16% | NASDAQ 0.47%

Building permits and new home sales both slipped in May. While this information is bearish, markets still advanced. Interestingly yields rose, as to indicate that the weaker economic data had little impact on rate cut expectations.

Thursday                     S&P 500 0.09% | NASDAQ 0.31%

Core durable goods orders showed weakness as markets expected a 0.2% rise and it actually fell 0.1% in May. Additionally, new jobless claims remain elevated at 233K. GDP was revised up for Q1 to 1.4%. The mixed bag of news on the day yielded a sideways market.

Friday                          S&P 500 0.41% | NASDAQ 0.75%

Michigan Consumer Sentiment only slipped to 68.2 in June, from 69.1 in May. 5-year inflation expectations remain anchored at 3%. Lastly, the PCE for May was released and the rate slipped from 2.7% to 2.6%. This continues the trend closer to the Federal Reserve Board’s (FRB) target of 2%. Markets gave up early gains. Equities and bonds slipped as the dollar, to the contrary, slipped as well. The former signals less chances of a rate cut, while the latter is a signal of rates likely being cut…

Conclusion                  S&P 500 0.89% | NASDAQ 1.72%

Markets bounced around for the week but ended on a solid footing. The S&P 500 ended the month 3.47% higher, while the NASDAQ gained 5.96%. The Quarter faired well as well, with the S&P 500 posting a 3.92% and the NASDAQ gained 8.26%. The Third quarter should mark higher volatility as valuations stretch and we reach 9-12 months within the current growth cycle.

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