Read the highlights of this week’s commentary from Helios:
- The S&P 500 closed out the first quarter on a new high, posting its strongest first-quarter performance (+10.6%) since 2019. Over the last 25 years the S&P 500 has averaged 1.2% in the first quarter. First-quarter returns have been greater than 10% only three times since 2000, with annual returns averaging 26.6% in those years.
- The Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index, increased by 2.5% year-over-year and signaled a slowdown after a robust January. Consumer spending surpassed expectations and spending at the end of last year was revised upward. Services spending experienced its most significant increase since July 2021, led by international travel and transportation.
- While overall income growth moderated, wages and salaries rose by 0.8%, the most significant increase since the start of last year. The savings rate dropped to its lowest point since the end of 2022, indicating that some people may be using their savings to maintain spending levels. Following the report, traders were pricing fewer than the 75 basis points of rate cuts that the Fed is projecting for 2024.
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