SPLV

These Three Metrics Tell A Story About The U.S. Economy

Major US indices down for the month, NASDAQ-100 hit with a 7.10% drawdown. Inflation, GDP, and unemployment are the big three metrics used to approximate the trajectory of the U.S. Economy. This month, the Consumer Price Index rose by 3.48% year-over-year. The Federal Funds Rate is expected to stay at current levels.

The Odds For Rate Hikes May Have Increased Dramatically

Inflation is accelerating, with core PCE and PCE Supercore rising at higher rates. Consumer inflation expectations are increasing. The current policy stance may need to shift from rate cuts to rate hikes if inflation continues to rise. The odds for rate cuts in 2024 are melting away.

Fed Meeting Preview: Unexpected Macro Data Likely To Alter Fedspeak

US economy grew at 1.6% in Q1 2024, the slowest rate of growth in seven quarters. The latest GDP print came in lower than expected while inflation has inched up. Changes in Fedspeak are anticipated as the Fed meets this week. The Fed's preferred measure of inflation is still the labor market.

Consumers Splurge On Services, Fixed Investment Surges, Imports Drag On GDP And There's A Blip In Government Spending

Wolf Richter: In Q1 2024, consumers spent very vigorously on services, but not so vigorously on goods. Imports and government spending dragged on GDP, but we think the slowdown in government spending was just a blip. Inflation re-accelerated sharply in Q1, and GDP grew less than in Q4. Gross private investment jumped at fastest rate in two years.

Between The Lines

Bears Come Out Of Hibernation

This week's AAII Sentiment Survey saw only 32.1% of respondents report as bullish, the lowest percentage since 11/2/23. Bearish sentiment has picked up to 34%. This is the highest bearish sentiment reading since last November. The bull-bear spread has been pushed into negative territory for the first time since 11-3.

Riding The Momentum - Looking Beyond The Tech Giants

Home Market Outlook Today's Market Riding The Momentum - Looking Beyond The Tech Giants. BlackRock Systematic's Systematic Equity Outlook explores macro and micro risks. The persistence of persistent market themes like AI has contributed to high equity index concentration and strong performance of the momentum factor. Inflation and rising geopolitical risks dominate the equity market narrative.

U.S. GDP Report Shows Stagflation Is Tightening Its Grip

U.S. GDP Report Shows Stagflation Is Tightening Its Grip. The soft landing narrative is dead as GDP growth falls below expectations and inflation rises. Traders are removing rate cuts from the outlook, leading to higher nominal Treasury rates and a stronger dollar. Rising rates and tightening financial conditions pose a significant risk to the equity market.