Market Recap
This week saw significant gains across all four major U.S. equity indexes:
- Russell 2000 (small-caps): Impressive 6%+ increase
- Dow Jones Industrial Average (DJIA): 1.6% gain
- S&P 500: 0.9% increase
- NASDAQ: 0.2% rise
Consumer Price Index (CPI) Decline
The week’s highlight was the unexpected decline in May’s Consumer Price Index, contrary to economists’ predictions of a slight increase.
This news significantly boosted markets, particularly benefiting rate-sensitive sectors such as Real Estate, Utilities, Materials, and Small-Cap stocks as well.
CPI Details
The U.S. Bureau of Labor Statistics reported:
- CPI declined 0.1% on a seasonally adjusted basis in June
- 12-month increase of 3.0% before seasonal adjustment
- Gasoline prices fell 3.8%, offsetting an increase in shelter costs
- Energy index decreased 2.0%
- Food index rose 0.2%
Small Business Optimism
The National Federation of Independent Businesses reported a slight increase in small business optimism:
- NFIB Small Business Optimism Index reached 91.5 in June, the highest reading of the year
- One-point increase from the previous month
- Still below the historical average of 98 for the 30th consecutive month
- Inflation remains the top concern for small business owners
The Week in Charts
What’s Going On In Your Portfolio?
Client portfolios are still fully invested as the stock market is starting to expand beyond the technolgy sectors.
Seasonal trends and the increasing odds of a September rate cuts continue to help push the market higher.
As always, our volatlty based risk mangement system remains in place to help manage downside risk, in case of any unforseen events.
Bond portfolios continue to be fully invested in High Yield bonds, which will benefit from the potential of lower rates in 2025.
Upcoming Economic Data to Keep an Eye On
Source: Trading Economics
