Market Update – June 14,2024

As of Thursday, the S&P has surged 1.82% for the week, reaching a record high. In contrast, the Dow Jones experienced a slight decline of 0.17%, while the Nasdaq soared by 3.37%. The market witnessed a substantial rally on Wednesday, triggered by a lower-than-expected inflation report.

The Consumer Price Index for All Urban Consumers (CPI-U) remained unchanged in May on a seasonally adjusted basis, following a 0.3 percent rise in April. This was in contrast to the expected .01% increase. The market responded with a rally, as investors saw this as a potential catalyst for the Federal Reserve to lower rates later this year. 

Later in the day, The Federal Reserve’s policy-making committee voted to keep the benchmark interest rate steady. Officials’ collective forecast for interest rates now implies only one quarter-point cut by the end of 2024, a significant shift from earlier this year. In March, the Fed penciled in three quarter-point cuts. Fed officials now forecast inflation to end the year higher than initially predicted. In his speech, Chairman Jerome Powell said it’s a “balancing act” to lower inflation, manage the “robust” labor market, and keep the economy growing.  

While the possibility of the Federal Reserve not lowering interest rates until 2025 is not surprising, we remain confident in our strategy. Despite the economy showing signs of cracks, we believe in the potential for buying opportunities to present themselves. We are ready to implement our cash reserves when the time is right. Money markets are still yielding around 5%, providing us with a steady return as we watch and wait, reinforcing our confidence in our approach.  

Enjoy a wonderful weekend. ~ Roger 

*Barrons 

*Bloomberg