Market Perspective for June 2, 2024

The shortened holiday trading week saw the broader indexes close modesty lower. Tuesday began the week and saw the release of the CB Consumer Confidence Index. The index came in at 102, which was higher than last month’s 97.5 and was also higher than the projected 96.

On Wednesday, the Richmond Manufacturing Index was released and came in above expectations. The index came in at zero compared to an expected negative six. On Thursday, revised gross domestic product (GDP) data for the previous quarter was released, and it continued the trend of beating expectations. For the first quarter of 2024, the economy grew at a rate of 1.3 percent compared to an expected 1.2 percent. However, it’s worth noting that this was revised downward from an original estimate of 1.6 percent growth.

Also on Thursday, unemployment claims data was released, and over the past seven days, there were 219,000 requests for benefits, which was slightly higher than the 218,000 projected, and it was also slightly higher than the 216,000 who requested benefits in the previous week.

Finally, monthly pending home sales data was released on Thursday morning, and during the month of April, sales fell 7.7 percent. This was compared to an expected drop of 1.1 percent and was much lower than the 3.6 percent increase seen in March.

On Friday morning, the final piece of news came out, which was the Core PCE Price Index for the month of April. During that time period, prices changed by .2 percent, which was lower than the expected .3 percent. This is important because this is the data point that the Fed looks closely at when determining what the market is doing. If this number continues to come in lower than expected, it may convince the Fed that inflation is easing and that a rate cut might make sense.

Despite a wild ride for most of the week, the S&P 500 finished the week almost exactly where it started. On Friday, it closed at 5,277, which was a 6.22 point drop over the past four trading days. The market was in freefall from Tuesday’s open until Friday morning when it hit a low of 5,196. The weekly high was 5,311 that was hit on the open of trading on Tuesday morning.

Like the S&P, the Dow saw some instances of volatility as it finished down 1.1 percent this week to close at 38,686 at the end of trading on Friday. The market had reached a low of 38,025 on Thursday before reversing later in the day and shooting up more than 1.5 percent on Friday. The market made its high of the week on Tuesday afternoon when it hit 38,519.

Finally, the Nasdaq would finish the week lower by 216 points, which was a loss of 1.16 percent for the week. It would reach a high of 18,871 on Tuesday before making a low of 18,224 on Friday. It would close the week at 18,536 after gaining back a significant portion of its weekly losses on Friday.

In international news, Australia announced on Monday that retail sales for the month were up .1 percent compared to an expected gain of .3 percent. The nation also announced that its inflation rate was 3.6 percent on an annual basis compared to an expected 3.4 percent. On Thursday morning, Switzerland announced that its GDP for the past quarter was up .5 percent compared to an expected .3 percent. On Friday, Canada announced that its GDP over the past month remained flat, which was in line with analyst expectations.

The upcoming week features the release of the nonfarm payroll reports. The ADP report will be released on Wednesday while the BLS report will be issued on Friday. In addition, the Bank of Canada (BOC) will be making their latest rate decision on Wednesday while the European Union (EU) will make a refinancing rate decision on Thursday morning.

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