Weekly Market Insights: Mixed Message From Fed Chair, Governor

Stocks finished the last week of June and Q2 mixed as investors digested a fresh round of economic data.

The Standard & Poor’s 500 Index slipped 0.08%, while the Dow Jones Industrial Average also dipped 0.08 percent. The tech-heavy Nasdaq Composite gained 0.24 percent. The MSCI EAFE Index tracks developed overseas stock markets and rose 0.27 percent for the week through Thursday’s close.¹

Nasdaq Regains Lead

Last week opened with the S&P 500 and Nasdaq heading lower, while the Dow rallied on momentum from the prior week. But by mid-week, the leadership shifted with the Nasdaq pushing higher.²

With the back half of the week packed with fresh economic data, conflicting stories developed about the economy. New home sales fell 11.3 percent in May—the largest month-over-month drop in a year and a half—while the supply of new homes hit a 16-year high. Meanwhile, first-quarter GDP revised slightly to 1.4 percent higher, and durable goods increased in May.^3,4,5

Friday's personal consumption and expenditure (PCE) data showed that core inflation slowed to 0.1 percent in May over the prior month and 2.6 percent year-over-year—its lowest annual rate in three years. Both figures were in line with expectations. Stock prices initially rallied on the upbeat inflation news, but the early gains faded as the trading day progressed.⁶

^{Source: YCharts.com, June 29, 2024. Weekly performance is measured from Monday, June 24, to Friday, June 28.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.}

Divergent Speakers

Federal Reserve officials have worked to communicate that despite the progress made on inflation in recent months, it remains above the Fed’s 2 percent target.

Last week, Fed Governor Michelle Bowman surprised the markets when she indicated, “I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse.” Fed Chair Powell, scheduled to speak on July 2, told investors on May 14, “I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike.”⁷

This Week: Key Economic Data

Monday: ISM Manufacturing Index. Construction Spending.

Tuesday: Fed Chair Jerome Powell speaks. Motor Vehicle Sales. JOLTS.

Wednesday: Jobless Claims. International Trade in Goods and Services. FOMC Minutes.

Friday: Employment Situation. Fed Balance Sheet.

^{Source: Investors Business Daily - Econoday economic calendar;  June 25, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Wednesday: Constellation Brands Inc. (STZ)

Friday: KalVista Pharmaceuticals, Inc. (KALV)

^{Source: Zacks, June 25, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

"If you have passion, a chip on the shoulder, a sense of humor, and you can explain what you do very well, it doesn't matter if you're a plumber or a singer or a politician. If you have those four things, you are interesting."

– Larry King

Think About Credits and Deductions Now to Prepare for Filing

Here are a few facts about credits and deductions that can guide you through your year-round tax preparation:

• Taxable income remains after someone subtracts any eligible deductions from their adjusted gross income, including the standard deduction. Some taxpayers may itemize their deductions to reduce their adjusted gross income.
• The Tax Cuts and Jobs Act changed itemized deductions. In comparing these changes, many individuals accustomed to itemizing may find it more beneficial to take the standard deduction.
• Generally, if a taxpayer’s itemized deductions are more significant than their standard deduction, they should itemize. Depending on the situation, some taxpayers may even be required to itemize.

Taxpayers can subtract tax credits from the total amount of tax they owe. To claim a credit, taxpayers should keep records demonstrating their eligibility. Some major tax credits include the child tax credit, the child and dependent care credit, the American opportunity credit or lifetime learning credit, and the earned income tax credit.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁸

Macro Dieting is a New Way to Approach Calorie Counting

Macro dieting is a diet that transcends basic calorie counting. Rather than counting simply the number of calories, you count the macronutrients, including proteins, carbs, and fats. How much of each macronutrient you need depends on your body type, goal, lifestyle, and activity level. Rather than depriving your body of nutrients, you instead focus on meals that give your body the nutrients it needs to be more efficient.

To start a macro diet, you must first calculate how many grams of each macro you should eat. A standard breakdown is 50-25-25, meaning that 50% of your calories come from carbs, 25% from protein, and 25% from fat. However, this breakdown will depend on your goals. For example, if you focus on strength training, eat more protein.

Tip adapted from Eatingwell.com⁹

This house attracts travelers with its brightness, yet it is often the loneliest home on the coast. What kind of house is this?

Last week’s riddle: At a stop sign on a rural road, there are two trucks in front of a truck, two trucks behind a truck, and one truck in the middle of two trucks. How many trucks are there in total? Answer: Three

Lake Eibsee
Garmisch-Partenkirchen, Bavaria, Europe, Germany

Footnotes and Sources

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.

The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The MSCI EAFE Index consists of the following developed country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

^{1. The Wall Street Journal, June 28, 2024}

^{2. The Wall Street Journal, June 28, 2024}

^{3. CNBC.com, June 27-28, 2024}

^{4. AP News, June 27, 2024}

^{5. Reuters, June 26, 2024} 

^{6. CNBC.com, June 28, 2024}

^{7. CNBC.com, June 25, 2024}

^{8. IRS.gov, March 1, 2023}

^{9. Eatingwell.com, January 29, 2023}