This week, there was a noticeable calmness that returned. And whether that is due to the kids going back to school (in Ohio, at least) or the return of lower volatility in the market, we’ll take it. Interestingly, the Cboe VIX index, which measures the 30-day expected volatility in the S&P 500, has returned to the levels we saw before last Monday’s panic after an unprecedented single-day spike last week. The 75% decline in the VIX has come on the back of rising markets and positive economic news this week. And in an effort to maintain the calm, we’re going to keep the update shorter this week with some interesting statistics we’ve seen recently.
Happy Birthday! August 14th marked the 89th anniversary of FDR signing the Social Security Act into law. This year, the trust fund will pay out $1.5 trillion in benefits to more than 71 million Americans, or roughly 21% of the U.S. population. (Source: Social Security Administration)
Mom, What’s for Dinner? 17% of Americans between the ages of 25 and 35 live with their parents. That’s up from a low of 7% in the 1970s and at the highest level since the 1940s. Of those adults living at home, 78% can’t afford the median rent level of the county they reside in. (Source: Apartment List)
The Streak Ends. The S&P 500’s 2.3% decline on 7/24/24 was the index’s first one-day drop of more than 2% since 2/21/23. The just-ended 356-trading day streak without a 2%+ drop was the longest since the record 949-trading day streak ended in February 2007. (Source: Bespoke)
Disinflationary Trend. In releases this week, headline CPI rose at the slowest YoY pace (2.9%) since March 2021, Core CPI rose at the slowest YoY pace (3.2%) since April 2021, and 3-yr inflation expectations from the N.Y. Fed’s Survey of Consumer Expectations dropped to the lowest level (2.33%) since at least 2013. (Source: BLS, NY Fed)
Price Ignores Supply. Even though the inventory of Existing Home Sales in the U.S. has risen 11 months in a row and supply is now back at pre-COVID levels, the median sales price hit another record high of $406,770 in June. (Source: National Association of Realtors)
Gender Parity. For the fourth straight Summer Olympics, the majority of the U.S. team were women (56%), and the U.S. had the most women competing of any country. Overall, women accounted for approximately 49% of all athletes at this year’s Olympics compared to just 4% the last time Paris hosted the Summer Games in 1924. (Source: A.P., NPR)
How ‘Bout Them Cowboys? Despite not winning a Super Bowl since 1996, the Dallas Cowboys are the first professional sports team to reach a value of $10 billion. With an estimated value of $10.32 billion, the Cowboys are worth $10.18 billion more than the $140 million owner Jerry Jones paid for the team in 1989 (a 13% annualized return). (Source: CNN)
Richer in Retirement. President Biden will receive an annual pension of nearly $413K or $13k more than his yearly salary of $400K as President. The totals are from a congressional pension of around $166K and an approximate executive branch pension of $247K. (Source: National Taxpayers Union Foundation)
Economy
- Markets were much calmer this week as cooler heads have prevailed (at least in the short term). By the end of the week, the S&P 500 was up 3.9%, the Nasdaq was up 5.3%, and the small-cap Russell 2000 was up 2.9%.
- U.S. Producer Prices increased 0.1% MoM in July, following a 0.2% rise in June and below forecasts of 0.2%.
- Core Producer Prices in the U.S., which exclude food and energy costs, were unchanged from the prior month in July, slowing from the 0.3% increase in June and below expectations of a 0.2% increase.
- U.S. CPI increased 0.2% MoM in July, up from a 0.1% decline in June and matching market expectations. Shelter prices rose 0.4%, accounting for nearly 90% of the monthly increase.
- U.S. Core CPI, which excludes volatile items such as food and energy, rose by 0.2% from last month, in line with market expectations, and up slightly from the 0.1% increase in June.
- Retail sales in the U.S. soared 1% MoM in July, following a downwardly revised 0.2% drop in June, which was way better than forecasts of a 0.3% gain. It is the biggest increase since January 2023.
Stocks
- U.S. equities were in positive territory. Technology and Consumer Discretionary were the top performers, while Real Estate and Utilities lagged. Growth stocks led value stocks, and large caps beat small caps.
- International equities closed higher for the week. Developed markets fared better than emerging markets.
Bonds
- The 10-year Treasury bond yield decreased five basis points to 3.89% during the week.
- Global bond markets were in positive territory this week.
- High-yield bonds led for the week, followed by corporate bonds and government bonds.
