Weekly Update – May 20, 2024
The Week on Wall Street
Stocks notched a solid gain last week in a mega-cap, tech-led rally bolstered by positive inflation news.
Dow 40,000
The week began quietly as market averages traded in a tight range, awaiting fresh inflation news.
On Tuesday, markets rose steadily throughout the day after digesting a mixed wholesale inflation report.1
The next day, a cooler-than-expected Consumer Price Index (CPI) report sparked a broad-based rally as the upbeat news raised investors’ hopes for a rate cut. The Nasdaq Composite and Standard & Poor’s 500 (which ended above 5300 for the first time) closed the day up 1.4 percent and 1.2 percent, respectively. Meanwhile, the bellwether 10-year Treasury yield fell to 4.35 percent.2,3
Investors took a break as the week ended, mostly yawning at mixed economic data. Notably, the Dow closed just above 40,000 on Friday.
Inflated Expectations
With the two critical inflation updates last week, attention shifted to the Federal Reserve’s next steps with interest rates.
The top-level CPI numbers (known as headline inflation) tend to be less important than what’s underneath: core inflation (CPI minus volatile food and energy prices) in the Fed’s eye. Core CPI came in at 0.29 percent for April, just below the 0.30 percent from Wall Street. It was the first time the core CPI was lower than forecasts in three months. The news revived speculation that the Fed might consider a rate adjustment as early as September.4,5
THIS WEEK: KEY ECONOMIC DATA
Monday: Fed Officials Michael Barr, Raphael Bostic, Christopher Waller, and Philip Jefferson speak for the first time.
Tuesday: Fed Officials Michael Barr, Raphael Bostic, Christopher Waller, and Philip Jefferson speak again. John Williams speaks for the first time for the week.
Wednesday: Existing Home Sales. 20-Year Treasury Bond Auction. FOMC Meeting Minutes.
Thursday: Jobless Claims. New Home Sales. Fed Balance Sheet.
Friday: Durable Goods. Consumer Sentiment.
THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Palo Alto Networks, Inc. (PANW)
Tuesday: Lowe’s Companies, Inc. (LOW)
Wednesday: NVIDIA Corporation (NVDA), The TJX Companies, Inc. (TJX), Target Corporation (TGT)
Thursday: Intuit Inc. (INTU)
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1. CNBC.com, May 14, 2024
2. The Wall Street Journal, May 15, 2024
3. CNBC.com, May 17, 2024
4. CNBC.com, May 14, 2024
5. The Wall Street Journal, May 15, 2024