Monthly Market Insight: June 2024

July 10, 2024

Market Overview

June saw a continuation of the rally that began in November, driven by excitement around AI, stable interest rates, robust economic data, and an increasingly supportive Federal Reserve outlook. Here’s what you need to know:

Stock Market Performance

  • S&P 500: +3.47%
  • Nasdaq 100: +6.18%
  • Dow Jones Industrial Average: +1.12%

The tech and AI sectors, particularly giants like Nvidia, continued to propel broader market gains.

Employment Trends

May’s job report surpassed expectations with 272,000 new jobs, primarily in healthcare, government, and leisure/hospitality sectors. This strength raises questions about the timing of potential interest rate cuts.

Inflation Update

  • Consumer Price Index (CPI): No monthly increase; 3.3% year-over-year
  • Core CPI: 0.2% monthly increase; 3.4% annual rate (down from 3.6%)
  • Producer Price Index (PPI): Unexpectedly fell 0.2% monthly

These softer inflation figures were welcomed by the market, supporting hopes for future rate cuts.

Federal Reserve Outlook

The Fed kept rates unchanged in June but hinted at a more aggressive stance on future policy. Chair Powell indicated the possibility of one rate cut in 2024, noting that current policy is restrictive.

Treasury Yields and Mortgage Rates

  • 10-year Treasury Yield: Closed near 4.342%, down from May’s 4.515%
  • 30-year Fixed Mortgage Rates: Hovering near 7%

What This Means for You

  1. Equity Investments: The continued rally, especially in tech and AI sectors, may present opportunities for long-term investors.
  2. Interest Rates: While the Fed is maintaining current rates, there’s increasing likelihood of cuts in the near future. This could impact borrowing costs and investment strategies.
  3. Real Estate: With mortgage rates stabilizing and inventory growing in many areas, the housing market may be shifting. This could create opportunities for both buyers and sellers.
  4. Economic Outlook: Strong job numbers coupled with easing inflation suggest a resilient economy, which could bode well for various investment sectors.

At Cypress Financial Group, we’re here to help you navigate these market conditions and align your financial strategy with your long-term goals. If you have any questions about how these market trends might affect your portfolio, please don’t hesitate to reach out.