Read the highlights of this week’s commentary from Helios:
- The Federal Reserve’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, rose by just 0.1% in May, the smallest increase since late 2020. The data matched economists’ expectations for both the overall PCE price index and the core PCE price index on a monthly and yearly basis.
- Real consumer spending increased by 0.3% in May after declining in April, supported by solid income growth, which offers hope for easing inflation without negatively impacting consumers. The slowdown in core inflation, coupled with robust consumer spending, provides relief to Federal Reserve officials concerned about the economy’s momentum.
- U.S. consumer sentiment in June decreased less than initially estimated, with year-ahead inflation expectations falling to 3% from 3.3% in May, reflecting a more optimistic outlook on inflation.
- Last week concluded the first half of 2024, during which the Nasdaq soared 19.5%, fueled by the AI frenzy. The S&P 500 climbed 16.4%, while the Dow gained 4.7%. The AI theme has dominated the market this year, but looming factors such as the election, potential rate cuts, and evolving consumer behavior could increase volatility in the second half of the year.
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