What are our thoughts? August 16th, 2024
Economic Release – Retail Sales
Wow, a number that changed the direction of the market this week. Last Monday had market participants looking for the market to fall to the 200 day moving average (this is a technical target that is used to interpret the long term trend of the market). We never did hit that target on the S&P 500 and now the market has broken downtrends and my team of analysts are looking for the market to head higher from now to our first rate cut in September.
Retails Sales came in fort the month of July at 1.0% when the expected number was 0.3%
Economic Release – Consumer Price Index
A 2nd important number released this week was CPI (Consumer Price Index). This number came in line with expectations of a month over month increase of 0.2%. This month over month increase of 0.2% is exactly what our team wants to see, if this continues the Federal Reserve will hit their target.
Performance following First Rate Cut – by Lord Abbett
Here is a piece created by Lord Abbett that I wanted to share with you. It explains the performance of asset classes after the 1st rate cute, in the last 7 rate cutting cycles. Past performance is not a reliable indicator of future results, but you’ll see that the last 7 times we have gone through this cycle, bonds represented by the Bloomberg U.S. Aggregate index(green) has outperformed the S&P 500(blue). This highlights the power the bond market can have once we start to see rate cuts by the federal reserve.
Information was developed by First Trust, an independent third party. The opinions of Brian S. Wesbury, Robert Stein and Strider Elass are independent from and not necessarily those of RJFS or Raymond James.
