ND&S Weekly 5.27.24 - Happy Memorial Day!

There were very different results among the major US Stock Indexes last week.  Investors were concerned with stronger than expected economic data creating inflationary pressures.  However, the AI bell-weather company, Nividia, blew away earnings expectations sending the tech heavy Nasdaq to new highs. 

For the week the S & P 500 eked out a small gain of .05%, the Dow Jones Industrials lost 2.3% and the Nasdaq gained 1.42%.  Small stocks, measured by the Russell 2000, fell -1.21%.  Overseas markets also, weakened, with developed (EAFE) and emerging equities (EM) down .84% and 1.48%, respectively.  The price of oil fell around 2.3% for the week to $77.7 per, as US crude inventories increased.  Corporate earnings have been surprisingly strong, especially the tech sector.  With Roughly 96% of the companies in the S&P 500 have reported an average of 6% higher earnings than the same quarter a year earlier, according to Fact Sct. 

The minutes of Federal Reserve’s latest policy meeting showed concerns about stickier than expected inflation, shedding more doubt about the timeliness of interest rate cuts.  They continued to hold their benchmark federal-funds rate to a range between 5.25% and 5.5%, which is the highest in more than 20 years.  The yield on the benchmark rate for consumer loans and mortgages, the 10-year Treasury Note remained steady at 4.46%, up only 4 pbs for the week.  

On the economic front, the University of Michigan’s Consumer Sentiment Survey for May report a reading of 69.1 down from April’s 77.2.  High mortgage rates and home prices led to an unexpected 1.9% decline in home sales.  Despite the evidence of slowing consumer spending, business activity and the job market remain undeterred.  

The key economic indicators for the week will be the C B Consumer Confidence for May, The first quarter’s updated GDP, and the much anticipated PCE Index for April, which is the Federal Reserve’s inflation gauge.

“Honor to the solider and sailor everywhere, who bravely bears his country’s cause” – Abraham Lincoln