Weekly Economic Update – 07/01/2024

The Week on Wall Street

Stocks finished the last week of June and Q2 mixed as investors digested a fresh round of economic data.

The Standard & Poor’s 500 Index slipped 0.08%, while the Dow Jones Industrial Average also dipped 0.08 percent. The tech-heavy Nasdaq Composite gained 0.24 percent. The MSCI EAFE Index tracks developed overseas stock markets and rose 0.27 percent for the week through Thursday’s close.1

Nasdaq Regains Lead

Last week opened with the S&P 500 and Nasdaq heading lower, while the Dow rallied on momentum from the prior week. But by mid-week, the leadership shifted with the Nasdaq pushing higher.2

With the back half of the week packed with fresh economic data, conflicting stories developed about the economy. New home sales fell 11.3 percent in May—the largest month-over-month drop in a year and a half—while the supply of new homes hit a 16-year high. Meanwhile, first-quarter GDP revised slightly to 1.4 percent higher, and durable goods increased in May.3,4,5

Friday’s personal consumption and expenditure (PCE) data showed that core inflation slowed to 0.1 percent in May over the prior month and 2.6 percent year-over-year—its lowest annual rate in three years. Both figures were in line with expectations. Stock prices initially rallied on the upbeat inflation news, but the early gains faded as the trading day progressed.6

Divergent Speakers

Federal Reserve officials have worked to communicate that despite the progress made on inflation in recent months, it remains above the Fed’s 2 percent target.

Last week, Fed Governor Michelle Bowman surprised the markets when she indicated, “I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse.” Fed Chair Powell, scheduled to speak on July 2, told investors on May 14, “I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike.”7

Weekly Riddle

This house attracts travelers with its brightness, yet it is often the loneliest home on the coast. What kind of house is this?

Last week’s riddle: At a stop sign on a rural road, there are two trucks in front of a truck, two trucks behind a truck, and one truck in the middle of two trucks. How many trucks are there in total?

Answer: Three

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
www.grandcanyonplanning.com

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