Rover's Weekly Market Brief - 06/14/2024

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Economy

The Labor Department reported the consumer price index was unchanged in May this follows a seasonally adjust readings of (+0.3%) in April. The all items index has increased (+3.3%) over the last 12 months, a slowing from (+3.4%) the previous month. The shelter index increased (+0.4%) for the fourth consecutive month. The food index increased (+0.1%), while the food away from home index rose (+0.4%). Offsetting the increases was a (-2.0%) decrease in the energy index, the gasoline index was a primary contributor dropping (-3.6%). Core CPI inflation which excludes food and energy increased (+0.2%) in May, after rising (+0.3%) in April. The annual rate of core CPI inflation increased (+3.4%) as compared to (+3.6%) the previous month. Other indexes with significant increases over the last year include motor vehicle insurance (+20.3%), medical care (+3.1%), personal care (+2.9%), and recreation (+1.3%).

The Federal Open Market Committee (FOMC) announced that it will maintain the federal funds rate within a range of 5.25% to 5.5%, the same level set since the central bank’s July 2023 meeting. This marks the highest level in over two decades and the seventh consecutive meeting with no increase. The FOMC statement remained consistent, stating that it won’t be cutting rates “until it has gained greater confidence that inflation is moving sustainably toward 2%”. The FOMC’s latest quarterly economic projections show that economy is expected to grow 2.1% in 2024 and that the unemployment rate will be at 4.0%. The PCE Inflation forecast was raised to 2.6%, while Core PCE inflation was increased to 2.8%. The median fed funds rate was estimated at 5.1%, down from March’s projection of 4.6%, indicating a single rate cut was likely in 2024.

The Labor Department reported that the producer price index for final demand, which measures the prices that producers pay for goods and services, decreased by a seasonally adjusted (-0.2%) in May, following (+0.5%) in April. The index for final demand services was unchanged. The index for final demand goods fell (-0.8%), the largest drop since October ’23. Nearly 60% of the decrease in final demand goods was driven by a (-7.1%) drop in gasoline prices. Prices for final demand foods declined (- 0.1%), conversely the index for final demand goods less foods and energy increased (+ 0.3%). Excluding food, energy and trade services, core PPI was unchanged. Year over year the PPI moved up (+2.2%) from (+2.3%) the previous month. Core PPI inflation moved up (+3.2%) – matching April.

Upcoming Economic Reports:

Tuesday June 18 – Retail Sales (MoM) (May)

Friday June 21 – Existing Home Sales (MoM) (May)

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Lennar (LEN)	KB Home (KBH)	Evertz Technologies (ET.TO)	Darden Restaurants (DRI)	FactSet Research Systems (FDS)
La-Z-Boy (LZB)	SoftwareONE Holdings (SWONF)	Steelcase (SCS)	Kroger (KR)	CarMax (KMX)