We hope everyone enjoyed a fantastic Memorial Day on Monday. Once again, we’d like to take a moment to honor and celebrate the brave men and women who have paid the ultimate sacrifice for our freedom. We are deeply thankful for their service and sacrifice, which allow us to enjoy the liberties we cherish today.
Moving to financial markets, it was a lackluster week, as equities and fixed income were down across the board. Updated estimates of Q1 GDP came in lower, at 1.3%, down 30 basis points from the first estimate. The reduction was primarily driven by a downward revision in consumer spending, weighing on overall market sentiment. On Friday, the Fed’s preferred inflation gauge, Core PCE, showed minor signs of improvement, moving down to 0.2% MoM and 2.8% YoY. The change versus last year is the lowest reading since March 2021, which shows slow but continued progress.
Next week will bring another slate of job market reports, including JOLTs, ADP employment change, and the BLS Nonfarm payroll data. And while these are less important than inflation numbers, they will continue to help paint the overall economic landscape.
With that, we’ll share some interesting statistics we’ve encountered over the last few weeks. We hope you enjoy them.
LONG BULLS. The S&P 500’s new all-time high on May 15 extended the current bull market to 581 days dating back to October 2022. This bull is now longer than the median length of 522 days seen for the 26 prior bull markets since 1928.
SIX MONTHS. Since WWII, the S&P 500’s average change for the six months leading up to the presidential election has been +4.21%, with gains 84% of the time. The largest gain was 22% leading up to the 1980 election, while the largest decline was 29% before the 2008 election.
TAXES AND JOBS. Job postings tracked by job-listing website Indeed.com are now 5% below pre-pandemic levels in the 20% of states with the highest state income taxes, while job postings in the 20% of states with the lowest taxes remain 37% above pre-pandemic levels.
PAMPERED CARE. In 2023, the average annual cost of childcare for two children exceeded the average annual mortgage payment in 45 states and the average annual cost of rent in all 50 states. Hawaii, Oregon, Vermont, and New York were the least affordable states for center-based toddler care.
Economy
- Markets were down this week as negative sentiment seemed to have a hold on investors. The S&P 500 was down -0.5%, the Nasdaq was down -1.1%, and the small-cap Russell 2000 was flat.
- U.S. GDP grew at an annualized 1.3% in Q1 2024, below 1.6% in the advance estimate and 3.4% in Q4, mainly due to a downward revision in consumer spending.
- The U.S. GDP Price Deflator increased by 3.1% in Q1 2024, slightly below original estimates.
- U.S. personal income rose by 0.3% from the previous month in April, slowing from a 0.5% increase in the prior month but in line with market forecasts.
- Personal spending in the U.S. rose by 0.2% from April, the least since January. This was a slowdown from the downwardly revised 0.7% increase in March and missed market estimates of a 0.3% increase.
Stocks
- U.S. equities were in negative territory. Technology and Industrials led the decline, while Energy and Real Estate outperformed. Value stocks led growth stocks, and small caps beat large caps.
- International equities closed lower for the week. Developed markets fared better than emerging markets.
Bonds
- The 10-year Treasury bond yield increased five basis points to 4.51% during the week.
- Global bond markets were in negative territory this week.
- High-yield bonds led for the week, followed by corporate bonds and government bonds.
