The Fed Rate Cuts Have Not Been Cancelled: The Fed held rates steady at a top rate of 5.5% for the sixth consecutive meeting this week. While no move was expected, the resilient economy and hotter inflation surprises had the market bracing for the Fed to deliver a hawkish message when Powell took the podium after the FOMC meeting. That did not happen, and Powell’s comments were more dovish than expected. While Powell was peppered with repeated questions about whether current policy settings are restrictive enough given the economy’s strong performance, he pushed back against the possibility of the Fed raising rates again—music to the markets ears! Current policy settings may just need more time to work.

Our View: Powell’s messaging at the press conference is consistent with our view that rate cuts have been delayed, not derailed. We agree that rates are unlikely to move higher and still pencil in two to three rate cuts by year end.

Labor Market Is Still On Pace : There is no denying that the underlying strength of the economy has been powered by the labor market. In fact, job growth has remained remarkably robust, averaging 233k per month over the last year. However, this morning’s job report showed a slight cooling, with payrolls rising only 175k—the smallest gain in six months. Slowing, but at a very gradual pace.

Our View: Labor demand should ease further in the months ahead as the market rebalances from its pandemic-era extremes. But job losses should be minimal, with the unemployment rate remaining near historically low levels

Earnings Season Is In The Homestretch: The bulk of 1Q24 earnings season is behind us with 82% of the S&P 500 market cap having reported. Thus far, S&P 500 earnings have been solid—albeit with some winners and losers. S&P 500 earnings are on pace to rise for the third consecutive quarter, up 4.6% YoY. Both the percentage of companies beating (79%) and the magnitude of bottom-line beats (+8.4%) are above the 10-year average, and margins increased for the first time in four quarters. The strength in earnings was driven primarily by the mega-cap tech space, with some weakness beyond those names

Our View: Labor demand should ease further in the months ahead as the market rebalances from its pandemic-era extremes. But job losses should be minimal, with the unemployment rate remaining near historically low levels.

Our View On Inflation: We have long said that the downward move in inflation toward the Fed’s 2% target would not occur in a straight line. Yes, the stubbornly hot inflation prints have been disappointing, but there are other indicators that suggest inflation should move lower. First, softer labor demand is likely to dampen wage growth. Second, consumer spending is becoming more discerning, which was on display in the earnings reports for McDonalds and Starbucks. Third, crude oil prices are moderating (down ~10% from their recent peak). This, plus the upcoming seasonal peak in gas prices, should help drive inflation lower.

Everyone’s Car Insurance Has Been Going Up

https://www.kiplinger.com/personal-finance/why-has-car-insurance-gone-up-what-you-can-do

Many Are Asking If Social Security Will Even Exist In The Future……….. It Will

https://am.jpmorgan.com/us/en/asset-management/adv/insights/retirement-insights/future-of-social-security/?email_campaign=308040&email_job=485238&email_contact=003j0000016m3HTAAY&utm_source=clients&utm_medium=email&utm_campaign=ima-amer-DCIP-Monthly-ADV-04252024&memid=7220927&email_id=78891&decryptFlag=No&e=ZZ&t=306&f=&utm_content=Read-now

Good Article About Getting A Tax Strategy In Place

https://www.kiplinger.com/personal-finance/cpa-vs-tax-planner-whats-the-difference

Things That Could Affect Your Credit Rating

https://finance.yahoo.com/personal-finance/applying-for-credit-card-before-mortgage-234826543.html

Strategies For Home Buyers

https://www.kiplinger.com/real-estate/what-you-can-negotiate-when-buying-a-home

Good Explanation Of Money Market vs FDIC Savings Account

https://finance.yahoo.com/personal-finance/are-money-market-accounts-fdic-insured-202746503.html

Here’s How Much American Think Their Time Is Worth

https://finance.yahoo.com/news/times-money-much-heres-americans-093237852.html

Grand Parent Gifting Gets A Little Easier

https://finance.yahoo.com/news/fafsa-rules-opened-grandparent-loophole-091715024.html

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Ed Henrichs and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional.

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The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.