Economic Update 6-24-2024
- Economic data for the shortened week included some gains in retail sales and better results for industrial production, while existing home sales and housing starts fell back.
- Equities saw further gains globally, led by international more than U.S., where value outpaced growth. Bonds were mixed to lower as yields ticked higher. Commodities were also mixed, with declines in grains offset by a rise in crude oil.
U.S. stocks saw moderate gains in the four-day trading week, with mixed economic data to react to. By sector, consumer discretionary, energy, financials, and industrials all saw gains of at least a percent, which led to sharper ‘value’ outperformance over ‘growth’ for a change. Utility and technology (mostly due to Nvidia and Apple) stocks lagged the pack with negative returns, with the aside that Nvidia overtook Apple and Microsoft as the largest stock in the world, as measured by market cap. Real estate also fell back by nearly a percent with yields moving higher.
Foreign stocks experienced gains, with mixed results compared to the U.S., with strength in Europe and the U.K. outweighing a decline in Japan. The Bank of England left their key policy rate unchanged, as expected, although a couple of members voted for a quarter-point cut, pointing to potential broadening dovishness. However, the Swiss National Bank cut rates by 0.25% for the second meeting in a row, taking the policy level down to 1.25%; lower inflation was one catalyst, as was likely a desire to reduce the strength of their currency. Japan also appeared to be weighed down by uncertainty over upcoming monetary policy choices. Emerging markets also fared well for the week, led by rebounds in Mexico and South Africa, following election-related concerns during the last few weeks. This isn’t atypical, especially in certain emerging market nations, as a wider band of potential political outcomes (some on the more extreme side), can give way to sighs of relief when new administrations begin to look a bit more moderate and status quo.
Bonds fell back slightly last week, with yields ticking up across the U.S. Treasury yield curve, by several basis points from the 2-year area out to the 30-year. High yield outperformed slightly with positive results. Internationally, bonds lost ground in developed markets due to the secondary headwind of a stronger dollar, while emerging market bonds saw gains.
Commodities were mixed for the week, with energy up several percent, offset by agriculture down -4% (mostly due to higher wheat supplies), while metals were little changed. Crude oil prices rose over 3% last week to $81/barrel, due to lower U.S. supply reports and ramped up Israel-Gaza military activity.
|
Period ending 6/21/2024 |
1 Week % |
YTD % |
|
DJIA |
1.50 |
4.87 |
|
S&P 500 |
0.63 |
15.36 |
|
NASDAQ |
0.01 |
18.26 |
|
Russell 2000 |
0.80 |
0.40 |
|
MSCI-EAFE |
0.07 |
4.97 |
|
MSCI-EM |
0.98 |
7.42 |
|
Bloomberg U.S. Aggregate |
-0.15 |
-0.07 |
|
U.S. Treasury Yields |
3 Mo. |
2 Yr. |
5 Yr. |
10 Yr. |
30 Yr. |
|
12/31/2023 |
5.40 |
4.23 |
3.84 |
3.88 |
4.03 |
|
6/14/2024 |
5.51 |
4.67 |
4.22 |
4.20 |
4.34 |
|
6/21/2024 |
5.49 |
4.70 |
4.26 |
4.25 |
4.39 |
Sources: LSA Portfolio Analytics, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Deutsche Bank, FactSet, Financial Times, Goldman Sachs, JPMorgan Asset Management, Kiplinger’s, Marketfield Asset Management, Minyanville, Morgan Stanley, MSCI, Morningstar, Northern Trust, Oppenheimer Funds, Payden & Rygel, PIMCO, Rafferty Capital Markets, LLC, Schroder’s, Standard & Poor’s, The Conference Board, Thomson Reuters, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wells Capital Management, Yahoo!, Zacks Investment Research. Index performance is shown as total return, which includes dividends, with the exception of MSCI-EM, which is quoted as price return/excluding dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.
The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.