Three Things to Watch
- This will be a busy week, highlighted by the two-day U.S. Federal Reserve (Fed) meeting. This will be the second meeting under new Fed Chair Kevin Warsh, and no move is again widely expected. However, the markets will be keen to hear his views on inflation, economic growth and the outlook following the recent spike in oil prices. Futures currently price the next move from the Fed as an increase, with one to two priced in for this calendar year.
- Second-quarter earnings season continues, highlighted by four members of the Magnificent 7. Microsoft, Meta, Apple and Amazon report earnings on Wednesday and Thursday. With approximately 25% of S&P 500 companies having reported, earnings continue to be strong with 88% of companies posting a positive surprise, including 10 of 11 tech names that have reported to date.
- On Thursday, core personal consumption expenditures will be released, which is the Fed’s favored price measure. It is expected to show that inflation continues to run too hot, with core inflation expected at 3.3%.
Three Things to Know
- Stocks have significantly outperformed housing in the United States over the long run. Since 1975, the S&P 500 has delivered an average annual total return of +12.2%. This is more than double the +5.1% annual gain in U.S. home prices over the same period. (Source: Kobeissi Letter)
- The S&P 500 has gained around 110% since October 2022. Historical comparisons suggest the rally may still have room to run, as bull markets since 1949 have averaged around 192% returns over around 5.5 years. (Source: Mike Zaccardi)
- When major studios refused to finance “Monty Python and the Holy Grail” in 1974, the comedy troupe turned to an unexpected group of investors: some of Britain’s biggest rock stars. Led Zeppelin, Pink Floyd, Genesis, Jethro Tull and Elton John helped provide the film’s £175,000 budget, partly because they were fans of the show and partly because the investment offered a tax advantage during a time when the U.K.’s highest income tax rate reached 90%. (Source: Historic Vids)
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.
5785231- EXP: 07/31/2029