This week’s economic data reflected a resilient but uncertain U.S. economy. Stocks sold off as concerns grew that strong economic data might delay Federal Reserve rate cuts. Recession indicators remain mixed, with bullish signals from services and employment offset by bearish manufacturing and leading indicators.

U.S. stocks reached new highs after the presidential election and a 25-basis point rate cut by the Federal Reserve. Donald Trump was declared president-elect after winning key swing states, and Republicans took control of the Senate. The Fed’s rate cut brought funds rate down. Meanwhile, the ISM Services Index showed strong growth in October, despite disruptions from Hurricane Helene.

Stocks wrapped up October on a negative note, as last week delivered a series of important economic data points. The October jobs report showed the slowest hiring pace since 2020…

October was a mixed month for markets, but our market cycle assessment remained bullish. Despite this reading, we maintain concerns that the market may be cooling from a bullish run.

Markets continued their positive trend last week as retail sales posted better than expected, increasing by 0.4% in September, though real retail sales showed a slight decline annually after adjusting for inflation.

Markets continued their positive trend last week as retail sales posted better than expected, increasing by 0.4% in September, though real retail sales showed a slight decline annually after adjusting for inflation.

Stocks rallied last week on hopes of a soft landing and a strong start to the Q3 earnings season, with the S&P 500 closing above 5,800 for the first time.

Stocks ended the week slightly lower but still near all-time highs, as the September jobs report surprised markets with stronger-than-expected results. The unemployment rate fell to 4.1% in September and nonfarm payroll gains jumped to 254,000, both better than expectations.

During the last full week of September, equites saw gains, as softer-than-expected PCE inflation data signaled continued disinflation. The PCE Index showed annual headline inflation at 2.2% and core inflation at 2.7%, reflecting minimal monthly price increases of just 0.1% for both measures. Meanwhile, personal income and spending grew by 0.2% in August, and the personal savings rate held at 4.8%, indicating a fair balance of income, spending, and saving.

Last week, stocks hit new all-time highs, driven by the Federal Reserve’s jumbo 50 basis point rate cut, the first in over four years, reducing the Federal Funds Rate to 4.75%–5%. Additionally, in the Fed’s quarterly Summary of Economic Projections, the central bank reflected a more aggressive trajectory for future cuts.

Stocks regained ground last week as inflation data lifted confidence ahead of this week’s highly anticipated Federal Reserve meeting, where the Fed’s first rate cut is expected. The August CPI report showed inflation at 2.5%, slightly below estimates, while core inflation, which excludes food and energy, came in at 3.2%, slightly above forecasts. Similarly, the Producer Price Index indicated stable wholesale inflation in August, consumer sentiment improved for the second consecutive month, reflecting optimism despite election concerns, and the Employment Trends Index indicated stable labor market conditions.

Last week, stocks tumbled as concerns over an economic slowdown intensified, driven by weaker-than-expected job gains in August. The unemployment rate edged down to 4.2%, but only 142,000 jobs were added, falling short of projections.

While some indicators have become more bearish in recent months, we remain cautiously optimistic for a soft-landing scenario, especially as the Federal Reserve appears more committed to cutting rates in the coming months.

Last week, stocks gained ground as July’s inflation came in softer than expected, and retail sales exceeded forecasts, easing recession worries. The Consumer Price Index showed annual inflation at 2.9%, with core inflation at 3.2%, both down from June. The Producer Price Index also reflected a sharp drop in producer inflation. Meanwhile, retail sales surged by 1% month-over-month, led by auto-related purchases, fueling hopes for a “Goldilocks” economy. Consumer confidence rose slightly in August, as consumers cited recent changes in perceptions about the upcoming presidential election.

On the other hand, the labor market is showing signs of softening, with the highest level of insured unemployed persons since November 2021. Despite this, some metrics like the Employment Trends Index suggest this softening represents a normalization of the labor market rather than moving towards a full-blown recession. Q2 earnings have been largely positive, with most sectors surpassing expectations, though recession indicators remain mixed, keeping our market view cautious.

Stocks saw a sell-off last week due to intensified recession concerns following a weak July employment report and other bearish indicators, coupled with the absence of a definitive timeline for rate cuts from the Federal Reserve. The July Fed meeting left policy unchanged but hinted at a potential rate cut in September, with the market now pricing in a 79.5% chance of 50 basis points of cuts.

Another bullish week went down for stocks and bonds, as June’s CPI fell to -0.1% monthly and 3% annually, the lowest since June 2023. Core CPI dropped to 3.3%, a low since 2021. On the other hand, the Producer Price Index posted hotter than expected data, however this was largely overlooked by markets.

In Q2, both our economic cycle and tactical market cycle assessments remained positive, but less bullish than at the start of the quarter. This shift indicates emerging concerns in economic data, suggesting the US economy might be at a transitional point between downturn and recovery.

This week echoed the likelihood of a soft landing as June’s jobs report showed mixed results with nonfarm payroll rising, but an unexpected increase in the unemployment rate, hinting at a higher chance of Federal Reserve rate cuts in September. Both the ISM Manufacturing and Services Indexes indicated sector-wide weaknesses in June, suggesting an increased risk of an economic slowdown. Monitoring economic and inflationary data, especially the CPI print and the start of Q2 earnings in the week ahead, will be crucial.

Despite being more muted last week, stocks posted a positive first half of 2024. In this past week’s economic news, PCE inflation remained flat at 2.6%, personal income rose 0.5% in May, and consumer spending grew 0.2%. Consumer confidence fell slightly, with concerns about future economic conditions.

Economic data demonstrated a stable yet softer US economy last week, as May’s retail sales came in below expectations, with several important categories declining. Existing home sales volumes continued to fall, although the median home sales price reached a record high.

Stocks notched new all-time highs last week on news of a lower-than-expected CPI and PPI inflation reports, where consumer inflation clocked in at 3.3%, and producer inflation clocked in at 2.2%. During its June meeting, the Federal Reserve revised its projections, now anticipating only one rate cut in 2024 and raising inflation expectations. Meanwhile, consumer sentiment has unexpectedly declined in recent months on concerns of sticky prices.

Last week saw a continued rally in the markets, driven by a mixed jobs report that suggests the Federal Reserve may need to hold rates longer or continue with their current trajectory of potentially cutting rates this fall. The ISM Manufacturing index remained weak, while the ISM Services index highlighted the ongoing strength of the US economy. Looking ahead to this week, the Federal Reserve’s meeting on Wednesday will be pivotal in gauging the central bank’s future monetary policy action