FEATURED MARKET DATA
Strong Bond Returns
Third quarter bond returns were the strongest since the 4th quarter of 2023. Bond yields declined during the quarter as Fedspeak leaned dovish with the Fed refocusing attention on risks to the labor market. In September, the Fed completed its pivot with a more aggressive than expected 50 basis point rate cut.
by Laura Fox FEATURED MARKET DATA
Fed’s Attention Shifts to Employment
Lower than expected growth in July payrolls (114K) and an increase in the unemployment rate to 4.3% raised market concerns in early August that the Fed might be behind on cutting interest rates. During August, Fed speak increasingly focused on employment and provided indications the Fed plans to cut rates in its September meeting.
by Laura Fox FEATURED MARKET DATA
Strong Start to Second Quarter Earnings Season
With over half of S&P 500 companies reporting second quarter earnings by the end of July, the blended year-over-year earnings growth rate was 10.2%. This is ahead of the 8.9% expected growth rate at the end of June. More than 78% of companies reporting earnings have beat estimates and these companies have, on average, beat earnings forecasts by approximately 4%.
by Laura Fox FEATURED MARKET DATA
Soft Landing Narrative Returns
While the first quarter brought stronger than expected inflation and growth, economic data cooled in the second quarter. Core month-over-month CPI rose a faster than expected 0.4% in each of the first three months of the year but slowed to 0.3% and 0.2% in April and May, respectively. Core PCE, the Fed’s preferred measure of inflation, slowed even more to 0.1% in May.
by Laura Fox FEATURED MARKET DATA
Corporate Earnings Support Markets
With the first quarter corporate earnings season complete, S&P 500 companies reported a blended growth rate of 5.9%. The level was well ahead of market expectations and the strongest since the first quarter of 2022. The breadth of earnings beats was also strong, with the percentage of companies exceeding earnings growth expectations above average.
by Laura Fox FEATURED MARKET DATA
A Mixed Bag of Data
Inflation, employment and GDP growth data received in April all contributed to declines in stock and bond prices. During April, Fedspeak focused on patience with respect to a potential rate cut. In his press conference following the May 1, 2024, FOMC meeting, Federal Reserve Chairman Powell noted a “lack of further progress” regarding inflation data, while reiterating that policy remains sufficiently restrictive.
by Laura Fox FEATURED MARKET DATA
Core Inflation Moderating
Though the path to lower inflation has been somewhat bumpy, the trend in Core PCE (Personal Consumption Expenditures), the Fed’s preferred measure of inflation, continues downward. Year-over-year growth in Core PCE declined to 2.8% in February.
by Laura Fox FEATURED MARKET DATA
Economic Growth Propels Stocks
Strong economic data helped lift the S&P 500 by 5.17% in February as markets also priced in a Federal Reserve that may be slower to cut rates. The Citi Surprise Index, which compares forecasted economic data to reported data, rose in early February on higher employment and inflation data.
by Laura Fox FEATURED MARKET DATA
Economic Growth Continues
The Federal Reserve referenced the “evolving” economic outlook in a statement following its January 31st meeting in a nod to stronger growth and the potential impact on the path of interest rates. Prior to the meeting, the Bureau of Economic Analysis announced the “advance” estimate of GDP increased at an annual rate of 3.3% in the fourth quarter of 2023.
by Laura Fox FEATURED MARKET DATA
Markets Rally on Dovish Fed
Stocks and bonds continued to rally in December resulting in strong returns for equity and fixed income markets in 2023. Favorable economic data increased expectations in early December that the Fed would begin to pivot toward lower rates. Fed officials confirmed this at the December Fed meeting as the Summary of Economic Projections showed three 0.25% rate cuts expected in 2024.
by Laura Fox 