Disinflation Trend Continues: Headline and core inflation measures came in as expected for both the CPI and PCE Price Index.
Equity Markets Advanced in May: The S&P 500 was higher by 4.8% in May and is higher by 9% so far this year.
Robust Earnings Performance: For the full year, given the better-than-anticipated results thus far, operating earnings for the S&P 500 are still expected to grow 13%
Fixed Income Market Volatility: The month of May continued the pattern we saw in April with a more volatile interest rate market.
Data Driven Fed Leads to Data Driven Markets: Markets are reacting to each data point, trying to interpret how it will impact the Fed’s decision-making process.
Outlook Largely Intact: Although data has been mixed so far in 2024, our outlook on the key themes driving equity and fixed-income markets remain intact.
Equity Markets
In May, the S&P 500 exhibited a strong start, surging by 5.6% to reach a record high of 5,321 by May 21st. However, the index struggled to stay above the 5,300 mark, ultimately slipping by -0.8% for the remainder of the month, but still closing with a respectable overall gain of 4.8%. Among sectors, Information Technology saw the most significant gains, climbing by 10%, followed by Utilities with a solid return of 7%. Conversely, Energy was the sole sector to experience a decline, dropping by -2.8% due to decreased oil and natural gas prices. Looking at the broader picture, the index has seen a year-to-date increase of 11%, with Communication Services, Technology, and Utilities leading the charge, all boasting returns surpassing 13%. The gain in Utilities is interesting, as investors are looking for the “next AI” trade, boosting the stock prices of power generation and distribution companies.
This year has witnessed a significant contrast among major indices, highlighted by the Dow Jones Industrial Average and the S&P 500 Equal Weighted Index showing only modest gains of 2% and 4%, respectively. In stark contrast, both the S&P 500 and the technology-focused Nasdaq have surged by more than 9%- propelled largely by the remarkable ascent of AI-related stocks. These technological advancements have displayed extraordinary resilience and persistent upward momentum, contributing substantially to the impressive performance of these indices.
Disinflation Trend Continues
Disinflation Trend Continues
Disinflation Trend Continues
Highlights
Equity Markets
In May, the S&P 500 exhibited a strong start, surging by 5.6% to reach a record high of 5,321 by May 21st. However, the index struggled to stay above the 5,300 mark, ultimately slipping by -0.8% for the remainder of the month, but still closing with a respectable overall gain of 4.8%. Among sectors, Information Technology saw the most significant gains, climbing by 10%, followed by Utilities with a solid return of 7%. Conversely, Energy was the sole sector to experience a decline, dropping by -2.8% due to decreased oil and natural gas prices. Looking at the broader picture, the index has seen a year-to-date increase of 11%, with Communication Services, Technology, and Utilities leading the charge, all boasting returns surpassing 13%. The gain in Utilities is interesting, as investors are looking for the “next AI” trade, boosting the stock prices of power generation and distribution companies.
This year has witnessed a significant contrast among major indices, highlighted by the Dow Jones Industrial Average and the S&P 500 Equal Weighted Index showing only modest gains of 2% and 4%, respectively. In stark contrast, both the S&P 500 and the technology-focused Nasdaq have surged by more than 9%- propelled largely by the remarkable ascent of AI-related stocks. These technological advancements have displayed extraordinary resilience and persistent upward momentum, contributing substantially to the impressive performance of these indices.
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