Market Week: June 24, 2024

The Markets (as of market close June 21, 2024)

Wall Street rode a rally in tech and AI stocks for most of last week. The end of the week saw a bit of a downturn, but not enough to keep the benchmark indexes listed here from closing the week higher. The large caps of the Dow led the indexes, followed by the Russell 2000, the Global Dow, and the S&P 500. The Nasdaq inched higher. Despite a dip at the end of the week, crude oil prices posted a second straight weekly gain. Ten-year Treasury yields rose higher after positive economic data prompted the Federal Reserve to refrain from cutting interest rates in the third quarter. The market sectors mostly advanced last week, led by consumer discretionary, financials, and communication services. Utilities declined, while information technology ticked lower.

Monday saw megacaps rally, pushing both the S&P 500 and the Nasdaq to new record highs. Each of the benchmark indexes listed here posted gains, led by the Nasdaq, which advanced 1.0%, while the S&P 500 and the Russell 2000 rose 0.8%. The Dow gained 0.5% and the Global Dow climbed 0.4%. Ten-year Treasury yields added 6.6 basis points to close at 4.27%. Crude oil prices broke the $80.00 per barrel mark after gaining $2.17 to reach $80.62 per barrel. The dollar (-0.2%) and gold prices (-0.7%) slid.

Stocks continued to rally last Tuesday as both the S&P 500 and the Nasdaq again reached record highs. The Global Dow (0.6%) led the benchmark indexes listed here followed by the S&P 500 (0.3%). The Dow and the Russell 2000 gained 0.2%, while the Nasdaq eked out a 0.03% advance. The yield on 10-year Treasuries fell 6.2 basis points to 4.21%. Crude oil prices rose to $81.46 per barrel. The dollar slipped 0.1%, while gold prices gained 0.7%.

The stock market was closed last Wednesday for Juneteenth, which gave investors a chance to review and reset. Thursday saw a pullback in tech megacaps, as investors captured recent gains, which led to a decline in the Nasdaq (-0.8%) and the S&P 500 (-0.3%). The small caps of the Russell 2000 also fell, dropping 0.4%. The Dow advanced 0.8% and the Global Dow rose 0.2%. Yields on 10-year Treasuries inched up to 4.25%. Crude oil prices continued to climb higher, gaining nearly 1.0% to $82.34 per barrel. The dollar rose 0.4% and gold prices gained 1.1%.

Stocks declined last Friday to close out the week. The Global Dow fell 0.5%, the Nasdaq and the S&P 500 dipped 0.2%, while the Russell 2000 rose 0.2%. The Dow was essentially flat. Ten-year Treasury yields ended the day where they began. Crude oil prices rose $0.64 to $80.65 per barrel. The dollar inched up 0.2%, while gold prices fell 1.4%.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • Retail sales inched up 0.1% in May and 2.3% above May 2023. Retail trade sales were up 0.2% last month and 2.0% above May 2023. Nonstore retailer sales were up 0.8% in May and 6.8% over the last 12 months. Sales at food services and drinking places fell 0.4% in May but were up 3.8% from May 2023.

  • Industrial production rose 0.9% in May. Manufacturing output posted a similar gain of 0.9% last month after declining in each of the previous two months. Mining increased 0.3% in May, and utilities advanced 1.6%. Total industrial production in May was 0.4% higher than its year-earlier level.

  • The number of issued residential building permits fell 3.8% in May and 9.5% from a year ago. The number of issued building permits has not increased since February. Building permits for single family homes declined 2.9% last month. Housing starts fell 5.5% last month and 19.4% below the May 2023 estimate. Single-family housing starts in May were 5.2% under the April estimate. Housing completions also declined last month, falling 8.4%. However, residential completions were 1.0% above the May 2023 figure. Single-family housing completions were down 8.5% for the month.

  • Sales of existing homes declined 0.7% in May and 2.8% over the last 12 months. Unsold inventory sat at a 3.7-month supply at the current sales pace, up from 3.5 months in April and 3.1 months in May 2023. The median price for existing homes in May was $419,300, the highest price ever recorded and an increase of 3.1% from April ($406,600) and up 5.8% from one year ago ($396,500). According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.87% as of June 20, down from 6.95% the prior week but up from 6.67% one year ago. Sales of single family homes declined 0.8% from April and 2.1% from the prior year. The median existing single-family home price was $424,500 in May, up from $411,100 in April and well above the May 2023 estimate of $401,500.

  • The national average retail price for regular gasoline was $3.435 per gallon on June 17, $0.006 per gallon above the prior week's price but $0.142 per gallon less than a year ago. Also, as of June 17, the East Coast price fell $0.013 to $3.357 per gallon; the Midwest price increased $0.053 to $3.315 per gallon; the Gulf Coast price rose $0.041 to $2.992 per gallon; the Rocky Mountain price advanced $0.067 to $3.330 per gallon; and the West Coast price declined $0.078 to $4.293 per gallon.

  • For the week ended June 15, there were 238,000 new claims for unemployment insurance, a decrease of 5,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 8 was 1.2%, unchanged from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended June 8 was 1,828,000, an increase of 15,000 from the previous week's level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended June 1 were New Jersey (2.3%), California (2.2%), Washington (1.8%), Rhode Island (1.6%), Illinois (1.5%), Massachusetts (1.5%), Minnesota (1.5%), Nevada (1.5%), New York (1.5%), and Pennsylvania (1.5%). The largest increases in initial claims for unemployment insurance for the week ended June 8 were in California (+9,793), Minnesota (+4,397), Pennsylvania (+4,131), Texas (+2,309), and Illinois (+2,265), while the largest decreases were in North Dakota (-746), Missouri (-508), Tennessee (-279), Kansas (-245), and Idaho (-175).

Eye on the Week Ahead

The final and most complete edition of the gross domestic product report for the first quarter is out this week. Thus far, data has shown that the economy accelerated at an annualized rate of 1.3%. Also available this week is the report on personal income and outlays for May. April saw income rose 0.3%, while consumer prices increased 0.3% for the month and 2.7% over the 12 months ended in April.

Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2024.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.

Market Week: June 17, 2024

The Markets (as of market close June 14, 2024)

U.S. stocks outpaced the rest of the world last week as global investors sought relief from the turmoil caused by European elections. Tech stocks carried the market as investors digested a pair of cooling inflation reports. The Nasdaq closed at record highs every day last week, and the S&P 500 also posted a solid gain, while the Russell 2000, the Dow, and the Global Dow all lost ground. The benchmark 10-year Treasury yield saw its largest weekly decline of the year. Crude oil prices surged, gold prices rose, and the dollar advanced for the fourth week in a row.

Stocks edged higher to begin last week. Big tech firms, particularly AI companies, helped support the market uptick. Bond yields rose, with 10-year Treasuries closing at 4.46% after gaining nearly 4.0 basis points. The Nasdaq led the benchmark indexes listed here after gaining 0.4%. The S&P 500 and the Russell 2000 added 0.3%. The Dow rose 0.2%, while the Global Dow dipped 0.2%. Crude oil prices closed at about $77.95 per barrel, up $2.42. The dollar and gold prices advanced. Utilities and energy led the market sectors, while financials and materials underperformed.

On Tuesday, the Nasdaq (0.9%) and the S&P 500 (0.3%) notched fresh records following the announcement by a major tech company of its AI platform. The remaining benchmark indexes closed in the red, led by the Global Dow (-0.8%), followed by the Russell 2000 (-0.4%) and the Dow (-0.3%). Bond prices jumped higher, pulling yields down, with 10-year Treasury yields falling 6.5 basis points to 4.40%. Crude oil prices moved up marginally to $77.86 per barrel. The dollar edged up 0.1% against a basket of currencies, while gold prices gained 0.2%.

Stocks surged again on Wednesday when the latest inflation data came in cooler than expected, and ended the day higher even though the Fed later dialed back its interest rate forecasts for the remainder of 2024 (see below). Most of the benchmark indexes listed here posted gains led by the Russell 2000 and the Nasdaq, which climbed 1.8% and 1.5%, respectively. The S&P 500 added about 0.9%, followed by the Global Dow (0.4%). The Dow edged down 0.1%. Ten-year Treasury yields fell 11 basis points, landing slightly below 4.3%, in response to the news on inflation and interest rates. Crude oil prices rose again, closing at $78.47 per barrel. The dollar fell 0.5%, while gold prices rose 0.6%.

Stock market performance was mixed last Thursday, after a gauge of wholesale prices unexpectedly reported the largest decline in seven months. Only the Nasdaq (0.3%) and the S&P 500 (0.2%) held on to small gains, while the small caps of the Russell 2000 (-0.9%), the Global Dow (-0.7%), and the Dow (-0.2%) all lost value. Information technology and real estate gained the most among the market sectors, while communication services and energy fell the furthest. Ten-year Treasury yields ticked down to 4.24%. Gold fell 1.5% and crude oil prices declined 0.5%, while the dollar advanced 0.5%.

On Friday, global equity markets reacted to growing anxiety over a political crisis in France, and a closely-watched gauge of U.S. consumer sentiment dove to a seven-month low. Four of the benchmark indexes closed the session lower, led by the Russell 2000, which fell 1.6%. The Global Dow declined 0.6%, while the S&P 500 and the Dow dipped 0.4% and 0.2%, respectively. The Nasdaq edged up 0.1%. Gold prices jumped 1.2% and the dollar rose, while 10-year Treasury yields dipped to 4.21%. Crude oil prices ticked up slightly.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic News

  • The Federal Reserve announced that the target range for the federal funds rate would remain at 5.25%-5.50%, a decision that was widely expected. Based on projections for interest rates by the end of next year, it now appears that Fed officials anticipate making just one rate cut of 0.25% later this year, followed by four more cuts in 2025.

  • The Consumer Price Index was unchanged in May, after increasing 0.3% in April. The index less food and energy rose 0.2% in May, after rising 0.3% in April. Prices for shelter continued to climb in May, more than offsetting a decline in gasoline prices. Prices for energy fell 2.0%, while prices for food rose 0.1%. The CPI advanced 3.3% for the 12 months ended in May, a slower pace than the 3.4% advance for the 12 months ended in April. Energy prices increased 3.7% for the 12 months ended in May, while food prices increased 2.1% over the last year. Prices less food and energy (core CPI) rose 3.4% for the year ended in May, down from 3.6% in April, and the smallest 12-month increase since 2021. Prices for motor vehicle insurance increased 20.3% over the last year, and a 5.4% rise in shelter prices accounted for over two thirds of the 12-month increase in core CPI.

  • The Producer Price Index, which measures prices producers receive for goods and services, decreased 0.2% in May after increasing 0.5% in April. This was the largest drop in wholesale prices since October. For the year ended in May, the PPI rose 2.2%, edging down from a 2.3% rise in April. Producer prices less foods, energy, and trade services were unchanged in May, following a 0.5% increase in April. For the 12 months ended in May, prices less foods, energy, and trade services rose 3.2%.

  • Prices for U.S. imports decreased 0.4% in May following a 0.9% increase the previous month. This was the first 1-month decline since December 2023. Lower fuel and nonfuel prices contributed to the overall decline. Prices for imports rose 1.1% for the year ended in May. Export prices fell 0.6% in May after rising 0.6% in April. Lower prices for nonagricultural exports in May more than offset higher agricultural prices. The price index for exports rose 0.6% over the past 12 months.

  • The federal deficit for May was $347.1 billion, well above the May 2023 deficit of $240.3 billion. In May, government receipts were $323.6 billion and expenditures totaled $670.8 billion. Through the first eight months of fiscal year 2024, the government deficit sits at $1.2 trillion, significantly lower than the $1.7 trillion deficit over the same period of the previous fiscal year.

  • The national average retail price for regular gasoline was $3.429 per gallon on June 10, $0.087 per gallon below the prior week's price and $0.166 per gallon less than a year ago. Also, as of June 10, the East Coast price fell $0.073 to $3.370 per gallon; the Midwest price decreased $0.087 to $3.262 per gallon; the Gulf Coast price declined $0.094 to $2.951 per gallon; the Rocky Mountain price decreased $0.097 to $3.263 per gallon; and the West Coast price declined $0.116 to $4.371 per gallon.

  • For the week ended June 8, there were 242,000 new claims for unemployment insurance, an increase of 13,000 from the previous week's unrevised level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended June 1 was 1.2%, unchanged from the previous week's rate. The advance number of those receiving unemployment insurance benefits during the week ended June 1 was 1,820,000, an increase of 30,000 from the previous week's unrevised level. States and territories with the highest insured unemployment rates for the week ended May 25 were New Jersey (2.3%), California (2.1%), Washington (1.7%), Massachusetts (1.6%), Rhode Island (1.6%), Illinois (1.5%), New York (1.5%), Alaska (1.4%), Connecticut (1.4%), Nevada (1.4%), Pennsylvania (1.4%), and Puerto Rico (1.4%). The largest increases in initial claims for unemployment insurance for the week ended June 1 were in Minnesota (+2,788), California (+1,974), Ohio (+1,692), Pennsylvania (+1,566), and Florida (+784), while the largest decreases were in Michigan (-2,706), Texas (-1,822), Tennessee (-1,295), New York (-1,016), and Georgia (-809).

Eye on the Week Ahead

Several areas of the economy are highlighted this week, starting with the May retail sales report. Inflationary pressures at the retail level were somewhat muted in April. The Federal Reserve report on industrial production for May is also coming out. Industrial production was unchanged in April, although manufacturing output slowed. Lastly, the Census Bureau report on housing starts for May and data on existing home sales will be released. The number of issued building permits declined in April, while housing starts advanced. Sales of existing homes declined in April, although the median price for existing homes rose to over $400,000.

Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers.
Securities offered through Lincoln Investment, Broker/Dealer, Member FINRA/SIPC.
www.lincolninvestment.com

Outlook Financial Group, LLC and the above firms are independent and non-affiliated.

The Lincoln Investment Companies do not provide tax, legal, or social security claiming advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Diversification or asset allocation do not guarantee a profit or protect against a loss. Calculators are provided only as general self-help planning tools. Results depend on many factors, including the assumptions you provide and may vary with each use and over time. We do not guarantee their accuracy, or applicability to your circumstances.

Prepared by Broadridge Advisor Solutions Copyright 2024.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.