FMI - JULY 2024 NEWSLETTER

FMI MARKET UPDATE

To those of you that have been praying for warmer weather – please stop. It was 108* in my car yesterday, and my sunglasses were so hot that they seared the bridge of my nose. My sunglasses, however, haven’t been the only thing to burn faces this month. The markets LOVED the most recent round of economic reports and have continued to rally throughout June. On top of a lower-than-expected jobs report (JOLTS), month-to-month CPI (consumer price index) showed NO price increases in the month of May, and month-to-month PPI (producer price index) actually came in NEGATIVE, indicating that the prices producers paid in May were actually less than they were in April. Year-to-year CPI, however, is still sitting at 3.3%, which is well above the Fed’s target of 2%. While that has deterred some of the Fed members, most of them support at least one rate cut this year, although that did not happen at the June Fed meeting. Regardless of what these numbers say, though, we are all still feeling the pain at the grocery store, at the pump, and just about anywhere else.

The Dow Jones Industrial Average had a positive return this month after hitting 40,000 in May. YTD, the DJIA is +3.81%. The broader S&P 500 experienced a strong rally in May, and carried that throughout most of June, increasing its YTD gain to +14.48%. The tech-heavy NASDAQ Composite continued to outpace the S&P with a YTD gain of +18.13%. Crude Oil recovered slightly as summer demand increased. As a result, crude oil saw a healthy gain in June and increased the YTD gain to +13.72%. Gold stalled at the end of May and has not done much since, maintaining its YTD gain of +12.73%. Bitcoin bounced around $70,000 for the first couple weeks of June but ended the month around $60,000 as demand began to cool. Although it has fallen, it remains the best performing asset on this list with a YTD gain of +36.14%.

The month of July will likely see some more excitement. The CPI and PPI reports that will be released on July 11th and 12th, respectively, will influence the Fed’s rate decision on July 31st. As of this moment, probability suggests that the Fed will cut rates in September and December, but that could certainly change depending on how they read the economic data from June. Volatility is low but won’t stay low forever. As always, if you have questions about your account, please reach out to your advisor.