Market Drama

Welcome to this week’s Market Drama!

• The Stock Market:
  • The S&P was up 2.6% for the week, that makes it, 14.8% year-to-date.
  • Nasdaq was up even more, 3.2% last week, 30% year-to-date.
  • Five weeks in a row in which stocks have been up. 
• The Federal Reserve meeting last Wednesday, there was an agreement to stop the interest rate hike. 
  
  • Chairman Powell commented it might take a couple years before they start lowering interest rates. 
• Economic Data:
  • Producer Price Index (PPI) declined month over month by 0.3%. 
    • Positive indicator that CPI will continue to come down. 
  • Core inflation came down to its lowest level since November 2021. 
    • It is not coming down as headline CPI (driven by energy and food prices, for instance). 
  • Why has the economy been more resilient than expected? 
    • Look at household savings – the extra savings that we saw during COVID are still working their way through the system. 
    • Households are running down their excess savings, but there’s still about $1.2 trillion of those excess savings.  

What to look out for this week: 

• Chairman Powell will testify in the House and the Senate. 
• Flash U.S. PMI for manufacturing and services. 

Stay tuned for next week. 

– Andres