Letting Off Some Steam

Letting Off Some Steam

The financial landscape of the past week presented a mixed bag for investors, with smaller companies facing notable challenges and their larger counterparts managing to hold steady. The predominant theme was inflation, as both the Consumer Price Index (CPI) and the Producer Price Index (PPI) reported higher-than-anticipated figures. Despite fears of being trapped inside an inflationary pressure cooker, markets remain cautiously optimistic, anticipating a Federal Reserve rate cut in June and buoyed by the potential of artificial intelligence driving future market growth.

Economic indicators revealed nuanced details: February’s Core and Headline CPI increased by 0.4%, slightly above the forecasted 0.3%, continuing January’s rise, where we saw annual retail price adjustments reflecting increased costs. February’s hourly earnings matched expectations, but growth expectations were only 0.1%, which highlights the ongoing struggle of wages to keep pace with inflation. PPI data further emphasized the inflationary environment, with both headline and core figures surpassing expectations at 0.3% and 0.6%, respectively. Retail sales, however, fell short of projections, which we believe could be a sign of the embattled consumer facing spending constraints. Meanwhile, both initial and continuing jobless claims presented “softer”-than-expected prints, a sign that could encourage higher-for-longer Fed policy if inflation remains a threat.

Weekly Performance


Data Source: Factset®        Performance Period:      3/11/2024    3/15/2024

A significant development emerged in the housing sector, as the National Association of Realtors (NAR) announced a landmark $418 million settlement, poised to transform the commission structure within the industry. This agreement proposes the elimination of traditional upfront commissions for buyer’s agents for homes listed on the MLS, a practice that significantly inflates costs, often making the U.S. real estate market more expensive compared to other developed countries. Typical real estate commissions in the US total 6% of the sale price and are split by buyer’s and seller’s agents as a requirement to list on the MLS. This shift, pending court approval, has potential to release some built-up steam in housing, potentially benefiting consumers by lowering real estate agent commissions and, by extension, housing prices.

As we continue through the Lenten season and celebrate missionaries like St. Patrick, we are reminded of the three leaves of a shamrock and the illustration of the Trinity (An Tríonóid Naofa) it represented. “Go therefore and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit” (Matthew 28:19).

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