Financial Well-Being Blog
Market Insights
June 14, 2024

Monthly Market Insights: June 2024

By FMG Suite
Market Insights
This article is brought to you by Wealth Management by CommunityAmerica, courtesy of FMG Suite.

U.S. Markets

Stocks rose in May as investors cheered upbeat Q1 corporate reports and signs that the economy was still strong while not overheating.

 

The Dow Jones Industrial Average gained 2.30 percent, while the S&P 500 Index added 4.80 percent. The tech-heavy Nasdaq composite picked up 6.88 percent.1

Q1 Corporate Reports

May wrapped up the Q1 company report season. The S&P 500 is on track to post a 5.9 percent growth rate for the quarter, which will be the highest year-over-year earnings growth rate since Q1 2022.2

 

Mid-month, mega-cap tech names rallied in anticipation of the Q1 corporate report from Nvidia, which makes semiconductors for artificial intelligence and is one of the largest stocks in the S&P 500 by market capitalization. Nvidia’s upbeat report helped lift the Nasdaq to a fresh record.3

 

Nvidia’s corporate report should not be considered a solicitation for the purchase or sale of the company’s stock.

Investors See Goldilocks

Gains over the month were also driven by a delicate balance of “Goldilocks” economic data that were not too cold and not too hot. For example, 175,000 jobs were created, which was a solid number but less than the 240,000 jobs that economists had expected.4

 

In addition, a cooler-than-expected Consumer Price Index (CPI) report released mid-month sparked a broad-based rally as the news raised investors’ hopes that the Fed might adjust interest rates at some point this year. The news helped push the Dow above 40,000 for the first time.5


Sector Scorecard

Ten out of the 11 S&P 500 sectors ended in the green, led by Utilities (+8.98 percent), Technology (+7.08 percent), and Communication Services (+6.94 percent). Real Estate (+5.11 percent), Materials (+3.28 percent), and Financials (+3.25 percent) also posted solid gains. Consumer Staples (+2.45 percent), Health Care (+2.40 percent), and Industrials (+1.68 percent) and Consumer Discretionary (+0.20 percent) rounded out the winners. Energy (-0.32 percent) ended the month lower.6

What Investors May Be Talking About in June

In the month ahead, attention is expected to shift to Apple for its annual Worldwide Developers Conference, scheduled for June 10 through 14.7

 

Apple is expected to release its latest iPhone software and preview what is coming for the second half of the year. Apple will tease new features of upcoming software releases, and investors are expecting to gain insight into Apple’s artificial intelligence strategy.7

 

Apple’s corporate event should not be considered a solicitation for the purchase or sale of the company’s stock. While AI mentions from S&P 500 companies have steadily increased, Apple has not provided many updates on its AI strategy. Some anticipate that Apple will give more details about its approach at the conference.8

World Markets

The MSCI–EAFE Index gained 3.29 percent in May as markets rallied globally.9


European stocks performed well, with Germany picking up 3.16 percent and the United Kingdom tacking on 1.61 percent. Spain led, gaining 4.31 percent, while France was flat (+0.10 percent).10


Pacific Rim markets were mixed. Australia rose 0.49 percent, and China’s Hang Seng Index rose 1.78 percent. However, Korea was down 2.06 percent, and Japan’s Nikkei was flat (+0.21 percent).11

Indicators

Gross Domestic Product (GDP)

The second estimate of economic growth in the first quarter was revised downward, from 1.6 percent to 1.3 percent.12


Employment

Employers added 175,000 jobs in April compared with the 303,000 jobs created in March and less than the 240,000 expected. The unemployment rate ticked up to 3.9 percent, while average hourly earnings increased 3.9 percent year over year in April. Both unemployment and wage growth were less than expected.13

Retail Sales

Retail sales remained unchanged in April, following a revised increase of 0.6 in March. The April figure was below expectations.14

Industrial Production

Industrial output fell 0.3 percent in April, driven by declines in durable consumer goods (cars and car parts) and electrical equipment and appliances. The April number missed expectations.15

Housing

Housing starts rose by 5.7 percent in April, as builders anticipated pent-up demand from buyers on the sidelines.16


April existing-home sales dropped 1.9 percent from March 2024 as demand exceeded available inventory. April sales were down 1.9 percent from a year earlier. The median sales price was up 5.7 percent from a year earlier to $407,600.17


New home sales fell 4.7 percent to a seasonally adjusted rate of $634,000, as higher mortgage rates appeared to take a toll on demand.18

Consumer Price Index (CPI)

Consumer prices rose 0.3 percent in April over the previous month and 3.4 percent compared with a year prior, both in line with expectations. Core inflation (CPI minus volatile food and energy prices) rose 0.29 percent for April and 3.6 percent year over year—the lowest increase in three years and just below expectations. It was the first time in three months that core CPI was lower than forecast.19


Durable Goods Orders

Orders of manufactured goods designed to last three years or longer rose 0.7 percent in April compared with a 0.8 percent increase in March. The April increase exceeded expectations.20

The Fed

Minutes from the April/May Federal Open Market Committee meeting, released on May 22, stated that some Fed officials worried about the lack of progress on inflation. At that meeting, the Federal Open Market Committee (FOMC) kept the Fed funds rate steady at the 5.25–5.50 percent target range.21

By the Numbers: All About Oceans

  • Largest wave on record, set on July 9, 1958, in Alaska - 1,720 feet22
  • Deepest place in the ocean, The Mariana Trench - 36,201 feet23
  • The percent of ocean floor the Abyssal Plains (10,000 feet below sea level) covers - 70%24
  • Mauna Kea on the Big Island of Hawaii is the tallest mountain on Earth - 33,500 feet24
  • How far Mauna Kea descends below sea level - 19,700 feet24
  • Height of Mauna Kea above seal level - 13,803 feet24
  • The length of the longest mountain range on Earth, all underwater - 40,000 miles24
  • Length of the average siphonophore, the ocean's longest animal - 150 feet25
  • Length of the biggest shark on Earth, the whale share - 61 feet26
  • The average lifespan of a whale shark - 80 to 130 years26
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About the Author
FMG Suite

FMG is an all-in-one marketing technology platform for financial advisors. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. FMG Suite is not affiliated with Copper Financial or CommunityAmerica. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, or state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

 

Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

 

Any companies mentioned are for illustrative purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, timeframe, and risk tolerance.

 

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