By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- Inflation will be front and center this week. On Friday, the May core Personal Consumption Expenditures (PCE) Price Index will be released and is expected to decelerate from what was experienced in April. Core PCE is expected up 0.1% month over month and 2.6% year over year, down from 0.2% and 2.8% in April. Core PCE is the U.S. Federal Reserve’s favored inflation gauge, and consensus readings would represent continued progress on the inflation front.
- Also on the data calendar is consumer confidence and consumer sentiment, new and pending home sales, and the second estimate of first-quarter gross domestic product (GDP). Consumer confidence is expected to be flattish, despite lower gas prices and a higher stock market, while consumer sentiment is forecast to continue its recent decline. The sentiment data (from the University of Michigan) is in the midst of a methodology change, which has been biasing the data downward in recent months.
- A couple of major names report earnings this week, including FedEx and Carnival Cruise Lines. Both are important bellwethers as a significant barometer of global shipping activity and the world’s largest cruise line operator, respectively.
Three Things to Know
- The S&P 500 has set 31 new all-time highs so far in 2024. The median return for the second half of the year when there have been at least 20 new highs in the first half is 9.6%. (Source: @RyanDetrick)
- S. households’ stock allocation as a percentage of financial assets hit a new record of 41.6% in the first quarter of 2024. This is up from 30.5% in 2020 and even higher than in the 2000 Dot-Com bubble peak of 38.4%. Since the 2008 financial crisis, household participation in stocks has more than doubled. (Source: @KobeissiLetter)
- The market cap-weighted S&P 500 is outperforming the equal-weight index by nearly 10% this year, following 12% outperformance in 2023. Since 1971, the only back-to-back years with a higher combined outperformance: 1998-1999. (Source: @charlibilello)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.