In Markets "In a Nutshell"

Markets “In a Nutshell” for May 13, 2024

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 2.20%, the S&P 500 was up 1.90%, and the NASDAQ rose 1.10%. Foreign stocks (MSCI EAFE) were also up, rising 1.00%. Bond prices were flat for the week, with the 10-year U.S. Treasury ending the week at 4.50%.  (Data source: Wall Street Journal)

Markets Near All Time Highs

Markets had a slight 5% pullback at the beginning of April and some worried about a larger pullback which was not the case as markets are back near all-time highs. The bounce in markets has been supported by higher better-than-expected Q1 earnings throughout the past few weeks. Earnings have bear estimates by an average of 8.5%, the highest since Q3 of 2021. Estimates also show earnings growth increasing throughout the next 4 quarters. As earnings season ends we could see volatility pick back up as the outlook on Fed policy is uncertain and the election headlines begin to ramp up. Despite all the noise, earnings have driven the market higher for the past 20 years as there is a direct correlation between S&P 500 earnings and the S&P 500 price.

April CPI Report This Week

The main headline for markets this coming week will be the April CPI report which will be released on Wednesday. This report could dictate the Fed’s next move as the May CPI report will be released during the next Fed meeting which will be too close to have the Fed pivot their view in only a couple of hours when the May report comes out on June 12th. Estimates show that there should be a decline in CPI and core CPI, if we see a rise in CPI markets will likely pull back as this would indicate rate cuts are further away. If we see a report that shows inflation has slowed more than expected, markets could move higher and reach a new all-time high. Some good news for inflation is that oil prices are back below $80 and used care prices are down 14% year-over-year. Investors are hopeful of a low CPI number, giving hope to Fed rate cuts this year.


How many consecutive months has unemployment been below 4%?  (Scroll Down for Answer)

  1.    21 months
  2.    27 months
  3.    34 months
  4.    39 months























Answer below.



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2.    27 months.  4% or below is typically considered full employment by many economists which is why the 4% number is a barrier for the market and investors.