Weekly Market Insights: Investors Anticipate Fed Rate Change
Presented by Apex Financial Group & Mount Vernon Investments
Stocks notched a solid gain last week in a mega-cap, tech-led rally bolstered by positive inflation news. Dow 40,000The week began quietly as market averages traded in a tight range, awaiting fresh inflation news. On Tuesday, markets rose steadily throughout the day after digesting a mixed wholesale inflation report.1 The next day, a cooler-than-expected Consumer Price Index (CPI) report sparked a broad-based rally as the upbeat news raised investors’ hopes for a rate cut. The Nasdaq Composite and Standard & Poor’s 500 (which ended above 5300 for the first time) closed the day up 1.4 percent and 1.2 percent, respectively. Meanwhile, the bellwether 10-year Treasury yield fell to 4.35 percent.2,3 Investors took a break as the week ended, mostly yawning at mixed economic data. Notably, the Dow closed just above 40,000 on Friday. |
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Source: YCharts.com, May 18, 2024. Weekly performance is measured from Monday, May 13, to Friday, May 17. |
Inflated ExpectationsWith the two critical inflation updates last week, attention shifted to the Federal Reserve’s next steps with interest rates. The top-level CPI numbers (known as headline inflation) tend to be less important than what’s underneath: core inflation (CPI minus volatile food and energy prices) in the Fed’s eye. Core CPI came in at 0.29 percent for April, just below the 0.30 percent from Wall Street. It was the first time the core CPI was lower than forecasts in three months. The news revived speculation that the Fed might consider a rate adjustment as early as September.4,5 This Week: Key Economic DataMonday: Fed Officials Michael Barr, Raphael Bostic, Christopher Waller, and Philip Jefferson speak for the first time. Tuesday: Fed Officials Michael Barr, Raphael Bostic, Christopher Waller, and Philip Jefferson speak again. John Williams speaks for the first time for the week. Wednesday: Existing Home Sales. 20-Year Treasury Bond Auction. FOMC Meeting Minutes. Thursday: Jobless Claims. New Home Sales. Fed Balance Sheet. Friday: Durable Goods. Consumer Sentiment. Source: Investors Business Daily – Econoday economic calendar; May 17, 2024 This Week: Companies Reporting EarningsMonday: Palo Alto Networks, Inc. (PANW) Tuesday: Lowe’s Companies, Inc. (LOW) Wednesday: NVIDIA Corporation (NVDA), The TJX Companies, Inc. (TJX), Target Corporation (TGT) Thursday: Intuit Inc. (INTU) Source: Zacks, May 17, 2024 |
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“The most difficult thing is the decision to act, the rest is merely tenacity.” – Amelia Earhart |
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Starting A New Hobby? These Tips Can Help You Understand The Tax SituationWhether you pick up painting or cook new concoctions in your kitchen, starting a new hobby is always fun and a great avenue to learn something new. However, there are some important tax considerations when starting a new hobby, especially if you are considering turning your newfound passion into a business. Taxpayers must report any income earned from hobbies, even if it does not involve a licensed business. While businesses should make a profit, hobbies are primarily recreation. The following nine factors can guide you in determining whether a hobby could also be considered a business, according to the IRS:
You can also deduct some of the expenses associated with your hobby. Within certain limits, taxpayers can typically deduct ordinary and necessary hobby expenses. An ordinary expense is common and accepted for the activity, while a necessary expense is appropriate. *This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional. Tip adapted from IRS.gov6 |
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3 Stretches For Your Lower BackWe spend so much time sitting in our cars and at our desks that it’s no wonder that our lower backs can become tight and even sore. These three lower back stretches will help improve your flexibility and recovery and may even help if you have lower back pain.
Tip adapted from Very Well Fit7 |
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Rigid is my spine, my innards are mostly pale, yet I am always ready to tell a tale. What am I?
Last week’s riddle: What should the following number be in this series: 103, 107, 109, 113, 127, ___ ? Answer: 131, as the whole series is made up of prime numbers. |
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Bullring Shopping Centre Birmingham, England, UK |
Footnotes And Sources
2. The Wall Street Journal, May 15, 2024 3. CNBC.com, May 17, 2024 4. CNBC.com, May 14, 2024 5. The Wall Street Journal, May 15, 2024 6. IRS.gov, November 15, 2023 7. Very Well Fit, January 24, 2023 |
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