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Market Recap – May 28, 2024

Keel Point

May 28, 2024

Last week’s economic and financial news was mixed, leaving financial markets generally unchanged from the prior week’s close.  The S&P 500 remains up 11.2% so far in 2024. 

  • Minutes from the Fed’s April 30/May 1 meetings were more hawkish than expected given Chair Powell’s post-meeting press conference.  The Fed remains data dependent, and most recent data reflect a resilient but slowing economy and improving consumer sentiment about inflation declining.  April core PCE inflation likely will show disinflation resuming when reported this coming Friday.
  • The second estimate of first-quarter 2024 GDP when reported later this week will show a downward revision.  Second-quarter GDP growth, however, remains on track to achieve a 2.7% annualized rate.
  • Nvidia’s Wednesday release of quarterly results showed its year-over-year revenues tripling and net profits rising 7-fold.  This reflects both better-than-expected artificial intelligence (“AI”) spending and a rising trend in business investment in productivity enhancing technology.

The economy and financial markets sometimes can have a greater impact on presidential elections – especially when they affect consumer pocketbooks.  So, it matters how we understand and think about inflation.

  • The definition of inflation is “rising” prices, but to consumers inflation has come to mean “higher” prices.  So, in the current election cycle, the rate of price increases (inflation) coming down from 9% per year to 3.4% (CPI) per year – while good news — doesn’t satisfy consumers who are paying 19% more for their purchases, which likely will impact how they vote in the November 2024 elections.
  • Higher tariffs on imported goods announced by President Biden and even higher, broader tariffs proposed by former President Trump will be inflationary, but neither generates a negative reaction from consumers.

 

 

 

Source: Axios Visuals / BLS

Disclosure:  Securities offered through Keel Point Capital, LLC, Member FINRA and SIPC.  Brokerage and Investment Advisory Services are offered under the Keel Point brand. Investment Advisory Services offered by Keel Point, LLC, an affiliate of Keel Point Capital, LLC. While reasonable efforts have been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Keel Point does not give tax, accounting, regulatory, or legal advice to its clients.

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