Stocks ended the turbulent week on a higher note, with the S&P 500 (SPX), Nasdaq Composite (NDAQ), and Nasdaq-100 (NDX) rising for a fifth straight week thanks to renewed tech optimism. On the flip side, the Dow Jones Industrial Average (DJIA) snapped its string of weekly increases, recording its biggest weekly loss since early April.
Investor sentiment was shaken by the minutes from the Federal Reserve May meeting, which revealed that the members of the rate-setting committee were concerned about stickier-than-anticipated inflation pressures and felt that there was no reason to cut interest rates before they received sufficient evidence that price increases were under control. Some policymakers have even suggested that the central bank should lift rates if economic data comes in hotter than expected.
Meanwhile, last week’s data points reflected a still-resilient economy, with weekly jobless claims, manufacturing and services PMIs, and durable goods orders coming in better than expected. Consumer sentiment also improved from last month, while 5-year household inflation expectations suggested slower price increases ahead. At this point, the incoming numbers confirm that there is no apparent need for the Fed to rush with the rate cuts.
This week will be shortened by Memorial Day, with the markets closed on Monday. With the earnings season nearly finished, there will be no releases that could swing market sentiment. However, the week will be quite heavy on economic data, including the crucial Core PCE print, which is the Federal Reserve’s preferred inflation measure.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» Q1 2024 GDP Growth Annualized (advanced estimate) – Thursday, 05/30 – This report provides an updated insight into the economy’s health from the previous quarter. The U.S. Bureau of Economic Analysis (BEA) estimates that the economy has slowed to an annualized growth of 1.5% from Q4’s 3.4%, lower than the initial estimate of 1.6%.
» April’s Core Personal Consumption Expenditures (Core PCE) – Friday, 05/31 – This report reflects the average amount of money consumers spend monthly, excluding seasonally volatile products such as food and energy. FOMC policymakers use the annual Core PCE Price Index as their primary inflation gauge. Following higher-than-expected March PCE numbers, economists, policymakers, and market participants will closely focus on the incoming report to understand whether the disinflationary trend is continuing.
» April’s Personal Income and Personal Spending – Friday, 05/31 – This report reflects the total value of personal income in the U.S., as well as the value of purchases of all types of goods and services by consumers. Since the consumer is one of the main driving forces behind economic growth, this report can provide an important indication about the overall health of the economy, which can impact the Fed’s decisions.
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