May 2024 Monthly

Will U.S. Economy Stabilize In Q2 2024 After 2 Quarterly Downshifts?

Weaker U.S. Job Numbers Boost Expectations Of A September Rate Cut

Weaker U.S. Job Numbers Boost Expectations Of A September Rate Cut. Non-farm payrolls rose 175k in April versus the 240k consensus. Job creation was weaker, unemployment higher and wage growth more subdued than expected in the April employment report. The unemployment rate moves up to 3.9% from 3.8% and the average work week dropped to 34.4 hours. The report has breathed new life into Federal Reserve interest rate cut calls.

Weekly Commentary: Instability

Jobs: Household Report Is Way Below A Weak Headline Number

The BLS reported a gain of 175k jobs which was below expectations of about 200k. The Household Survey was high last month but came in way below the Headline number. The unemployment rate rose slightly to 3.9%. April saw a reversal where part-time jobs were replaced by full-time. The BLS report was released on the first Friday of every month.

May 2024 Perspective

Home Market Outlook Today's Market May 2024 Perspective. US equities struggled last month, with the S&P 500, Dow Jones Industrial Average, and Nasdaq all falling by 4.16%, 5.00%, and 4.41%. The broader picture continues to be one of rising sovereign rates acting as a headwind to equity market returns.

The Jobs Report: A Soft Landing At Hand

Softer April Jobs Growth, Bulls And Doves Rejoice

April nonfarm payrolls increased by 175,000, below estimates, and pulled forward rate-cut expectations. Unemployment rate ticks up to 3.9% in April from 3.8% in March. Average hourly earnings came in softer than expected, signaling a decline in wage gains. Stocks futures jumped and yield plunged, but key data remains on tap.

April Jobs Report: Growth Cools Below 200K

Labor Department reports 175,000 jobs were added in April, well below expectations. Unemployment also ticked higher, while wage growth slowed further. Notable cooling occurred in both the healthcare and government sectors. The April jobs report is unlikely to change the Federal Reserve's current interest rate trajectory.

Fed Balance Sheet QT: -$1.60 Trillion From Peak To $7.36 Trillion, Lowest Since December 2020

Total assets on the Fed’s balance sheet fell by $77 billion in April, to $7.36 trillion, the lowest since December 2020. Since the end of pandemic QE in April 2022, the Fed has shed $1.60 trillion. The Fed has removed 38% of Treasury securities and 27% of MBS from the balance sheet.

U.S. Fed Keeps Interest Rates On Hold, Highlights Lack Of Progress On Inflation

U.S. Fed Keeps Interest Rates On Hold, Highlights Lack Of Progress On Inflation. Scott Colbourne with TD Asset Management says the Fed's focus is on the labor market. The Fed acknowledged a lack of progress on inflation and the reduction in the balance sheet runoff pace.

Federal Reserve Watch: The Beat Continues

Federal Reserve is committed to returning inflation to its 2 percent objective. The Fed will continue to reduce the size of its securities portfolio but at a slower pace starting in June 2024. $34.6 billion in securities came off of the Fed's balance sheet this past week.

Dollar Is Softer Ahead Of The Employment Report

Quick Thoughts: Fed Hawks Will Fly Lower - Eventually

Home Market Outlook Economy Analysis Quick Thoughts: Fed Hawks Will Fly Lower - Eventually. The Federal Reserve decided to leave the Fed funds rate unchanged at its meeting on May 1. The doves will come eventually - but first, we will have to wait and see these hawks fly a bit lower.

Dividends By The Numbers In April 2024

April 2024 proved to be yet another mixed month, on net, for the dividend-paying stocks of the U.S. Stock market. The number of extra dividends announced presaged a multi-year decline for the stocks in April 2014. Favorable dividend changes outnumbered unfavorable changes by a margin of 27% year-over-year. The most disappointing aspect of April 2024 is that industrial firms were not in favorables.

The Stock Market Is Vulnerable, But On Solid Footing

Home Market Outlook Today's Market The Stock Market Is Vulnerable, But On Solid Footing. The outlook for earnings growth remains fairly positive, but much of this is already in the price. This leaves the stock market vulnerable to the downside in a stagflation-like environment.

Evolving Fed Expectations And Asset-Allocation Implications

Franklin Templeton: The current macro backdrop is slightly atypical for an impending Fed easing cycle. Growth and labor markets remain strong, inflation levels are elevated. The implications for multi-asset investors remain positive for equities. We believe reflationary macro conditions and a peak in the fed funds rate are supportive for risk-taking.

Dip Or Correction?

Home Market Outlook Today's Market Dip Or Correction? Ryan Puplava looks at the reasons for the market weakness in April. Inflation and Higher Rates kick off the month of April. The 50-day moving average will be key to monitor to see if this is a short-term dip or correction.

Japan Drives Home Message

US dollar is mixed, but the spotlight is on the Japanese yen. The offshore yuan is trading stronger than the onshore yuan for the first time this year. Gold rebounded yesterday from nearly one-month lows but stalled around $2329. Japanese officials sold dollars shortly after the US equity market closed yesterday.

'Sell in May and go away': Does it apply in 2024?

'Sell in May and go away': Does it apply in 2024? The adage posits that stocks tend to underperform in the six months from May to October. The S&P 500 has had positive returns in 75% of summer periods. But bears have been pointing to the outsized market gains since late October.