Weekly Commentary (5/13/24) – Markets Finish Higher for the Week; Dow has Best Week of the Year

Erik Manchester |

Equity markets finished higher last week with the Dow finishing higher for the eighth-straight week and having its best week of the year.      

For the week, the DJIA gained 2.20% while the S&P 500 advanced 1.85%.  The tech-heavy Nasdaq finished higher by 1.14%.  For the week, the MSCI EAFE Index inched higher by 1.80% while emerging market equities (MSCI EM) jumped 0.99%.  Small company stocks, represented by the Russell 2000, added 1.18%. Fixed income, represented by the Bloomberg Aggregate, finished ahead by 0.09% for the week as yields moved slightly higher.  As a result, the 10 YR US Treasury closed at a yield of 4.502% (down ~2bps from the previous week’s closing yield of 4.518%).   Gold prices closed at $2,367.30/oz – up 2.97%.  Oil prices inched higher by 0.19% to $78.26 per barrel.         

Despite persistent inflation and geopolitical tensions, domestic companies are weathering the storm. 92% of S&P 500 companies have already reported earnings, and nearly 80% of companies surpassed expectations, according to FactSet.  

The week ahead will feature the closely-watched April Consumer Price Index (CPI).  Investors will be watching to see if the last few hotter-than-expected inflation reports will finally show some cooling off.  Expectations are for the CPI to have risen by 0.4% month over month and 3.4% year over year.  The CPI result will give investors good insight into the Fed’s next move.    Weaker inflation numbers should give the Fed confidence that inflation is back on a sustained path lower thus giving the Fed some breathing room on moving rates lower later this year.  Hotter inflation numbers along with sustained economic growth will likely lead to an extension of the current higher-for-longer environment.  The Producer Price Index is due on Tuesday and is expected to have risen by 0.3% month over month. 

We expect some market volatility this week as investors digest a slew of earnings and economic releases.  Diversification, patience and a bias towards quality will help investors manage through this period of heightened valuations and uncertainty.      

Enjoy the week.

“It is amazing what you can accomplish if you do not care who gets the credit.” – Harry S. Truman