Read the highlights of this week’s commentary from Helios:
- US inflation unexpectedly picked up in August due to higher housing and travel-related costs. The core Consumer Price Index (CPI), which excludes food and energy, rose by 0.3% from July – the largest monthly increase in four months – and by 3.2% from a year earlier. Headline CPI increased by 0.2% month-over-month and 2.5% year-over-year thanks to falling gas prices.
- US consumer sentiment climbed to a four-month high in September, driven by the lowest short-term inflation expectations since late 2020 and hopes for lower borrowing costs. The University of Michigan’s sentiment index rose to 69 from August’s 67.9, preliminary data showed. Consumers expect prices to rise at a 2.7% annual rate over the next year, the fourth consecutive month of declining short-term inflation expectations.
- Stocks had their best week in 2024, driven by a rotation in the second half of the week into companies expected to benefit from a Fed rate cut. On Friday, small-caps took the spotlight, with the Russel 2000 rising 2.5%, outperforming the tech mega-caps that have driven the bull market. The rotation is offering a promising sign that the rally may spread beyond the market’s biggest players.
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