“Summer” Break?

“Summer” Break?

We come into a shortened trading week and the unofficial start of summer riding on some better-than-expected earnings, as AI demand appears strong. Last week saw mixed equity markets, weaker bonds, and a mixed bag for alternatives, with gold and bitcoin higher, while oil sold off. Not all earnings were great, however, as weakened consumers, stretched by inflation and reduced discretionary spending, were blamed for the poor performance of TGT, LOW, WMT, and ROST. With consumer confidence on deck this week, we will have another look into strength of consumers. The week ends with what may be the most-watched indicator of season (and the Fed’s preferred measurement of inflation): PCE. The print is expected to show inflation softening, which could spell a big break for markets.

Weekly Performance

Data Source: Factset®        Performance Period:      5/20/2024    5/24/2024

In the investment world, this week brings with it the change of US trade settlement to T+1 (trade date + 1 day) from T+2 settlement, which aims to reduce delivery risk and increase access to liquidity. This has been a long time coming and the latest change to accelerate settlement timelines for securities transactions, which started at T+5. In 1993, the trade settlement period shortened for many securities to T+3, which stood until 2017. In 2017, the settlement cycle again shortened from T+3 to T+2. It is no small feat to change an industry standard, and we stand ready to embrace the change.

In econometric data last week, info was generally light. The FOMC May minutes took on a rather hawkish tone, pushing poor expectations of rate cuts. Durable Orders came in under expectations, at 0.7%. This was a large undershot of expectations of 1.3%. Last week saw initial jobless2 claims come in lower than expectations at 215k versus 220k, as continuing claims2 also came in light at 1,794k vs 1797k.

As we move into the end of May, earnings season has, for the most part, wrapped up, and eyes are watching inflation for progress. We take a moment coming off Memorial Day to remember all those in service to our country that made the ultimate sacrifice. Sacrifice for those in need is admirable in all respects, and we are reminded of things each of us can do, daily, to help those in need. “Defend the weak and the fatherless; uphold the cause of the poor and the oppressed. Rescue the weak and the needy; deliver them from the hand of the wicked” (Psalm 82:3-4).

Sources: Yahoo Finance,, and JP Morgan Market Insights

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