Weekly Economic Update
Last Week and the Economy
- Stock and cryptocurrency prices fell after Iran attacked Israel.
- New data from the Bureau of Labor Statistics shows that the inflation rate rose in March.
- The University of Michigan reported that consumer sentiment declined marginally.
- The Bureau of Labor Statistics reported that both import and export prices rose in March.
The major stock indices continued the prior week’s downward trend. The Russell 2k Small Cap Index fell by 2.92% while the Dow Jones Industrial Average declined by 2.37%. Additionally, the S&P 500 and NASDAQ reported losses of 1.56% and 0.45%, respectively. International stocks – represented by the MSCI-EAFE index – also fell by 1.19% for the week.
Investment Markets Reacted to Iran’s Attack on Israel
Late Saturday night, Iran launched an attack on Israel in retaliation for an April 1st airstrike in Syria. Given the distance between the countries and forewarning of the attack, Israel and allies – including the U.S. – had time to respond to the threat. According to Israel, most of the missiles and drones Iran sent were shot down and damage from the attack was minimal.
Initially, the added geopolitical turmoil led to unrest in investment markets. The major stock indices fell on Friday as investors prepared for the fallout from the imminent attack. Additionally, Bitcoin dropped by a substantial 7% on Saturday. However, both cryptocurrency and stock prices have recovered and shown signs of stabilization since that time.
Inflation Accelerated in March
The Bureau of Labor Statistics released the March Consumer Price Index which showed that prices rose by 0.4% from the previous month. With this increase, the annual inflation rate rose to 3.5% from the previous month’s reading of 3.2%.
Together, a 0.4% increase in Shelter costs and a 1.7% rise in Gasoline prices contributed more than half of the monthly price increase. On the other hand, Food prices were relatively stable with restaurant prices remaining the same as the prior month and grocery prices rising by just 0.1%.
Consumer Sentiment Declined Marginally
The April Survey of Consumers from the University of Michigan showed a slight decline in consumer economic outlook. The data showed that consumer interpretations of current economic conditions fell by 3.9% from the previous month while expectations for future conditions declined by a more modest 0.5%.
Overall, the Index of Consumer Sentiment declined by 1.9% for the month and has remained in a narrow range since January. Survey of Consumers Director Joanne Hsu noted that the change in 2024 readings has been “well under the 5 points necessary for a statistically significant difference in readings.” Hsu went on to suggest that “consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy.”
Import and Export Prices Rose
The Bureau of Labor Statistics reported that both import and export prices rose in March. For imports, fuel prices rose by 4.7% while all other imports rose by just 0.1%. Overall, import prices rose by 0.4%, which marked the third consecutive monthly increase and contributed to the first annual rise in over a year. Export prices rose by 0.3% for the month. This figure includes a 0.7% decline in agricultural export prices and a 0.4% increase in export prices for non-agricultural products.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
Trending Articles
5 Characteristics of a Quality Wealth Manager
June 15, 2023School of Financial Wellness
Looking for a quality wealth manager? We pulled together our list of the 5 most important qualities to consider during your search.
What are Required Minimum Distributions (RMD’s)?
July 21, 2023School of Saving and Investing
Required Minimum Distributions are minimum withdrawals that must be taken from retirement accounts once you reach a certain age.
Weekly Economic Update
April 15, 2024School of Financial Wellness
The U.S. added jobs and the unemployment rate declined. Americans earned and worked more last month. Construction spending slowed.
Key Economic Data Points
Unemployment Rate:
FOMC Target Rate:
GDP:
As of March 2024: 3.8% (Next Report: 5/3/24)
As of March 2024: 5.25% – 5.50% (Next Report: 5/1/24)
Q4 2023: +3.4% (Next Report: 4/25/24)
Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed, U.S. Bureau of Economic Analysis.
Weekly Quote:
Know what you own, and know why you own it.
-Peter Lynch
The Week Ahead – Economic Data & Events
Monday: Retail Sales, Empire State Manufacturing Survey, Business Inventories, SCE Labor Market Survey
Tuesday: Business Leaders Survey, New Residential Construction, Industrial Production and Capacity Utilization
Wednesday: Outlook-At-RiskThursday: Philadelphia Fed Manufacturing Survey, NAR Existing Home Sales
Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Wednesday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday)
Source: New York Fed
The Week Ahead – S&P 500 Companies Reporting Earnings
Monday: Goldman Sachs Group Inc. (GS), M&T Bank Corporation (MTB)
Tuesday: UnitedHealth Group Incorporated (UNH), Johnson & Johnson (JNJ), Bank of America Corp (BAC), Omnicom Group Inc (OMC), Morgan Stanley (MS), Airbnb, Inc. Class A (PNC), Bank of New York Mellon Corporation (BK), J.B. Hunt Transport Services Inc. (JBHT), United Airlines Holdings Inc. (UAL), Northern Trust Corporation (NTRS)
Wednesday: Prologis Inc. (PLD), Crown Castle International Corp (CCI), Abbott Laboratories (ABT), Progressive Corporation (PGR), Kinder Morgan Inc Class P (KMI), CSX Corporation (CSX), U.S. Bancorp (USB), Travelers Companies Inc. (TRV), Equifax Inc. (EFX), Discover Financial Services (DFS), Las Vegas Sands Corp. (LVS), Citizens Financial Group Inc. (CFG), MarketAxess Holdings Inc. (MKTX)
Thursday: Netflix Inc. (NFLX), PPG Industries Inc. (PPG), Intuitive Surgical Inc. (ISRG), Elevance Health Inc. (ELV), Marsh & McLennan Companies Inc. (MMC), Blackstone Inc. (BX), D.R. Horton Inc. (DHI), Genuine Parts Company (GPC), Snap-on Incorporated (SNA), KeyCorp (KEY), Comerica Incorporated (CMA)Friday: Huntington Bancshares Incorporated (HBAN)
Weekly Tip:
If you have trouble with impulse shopping online, don’t save your credit card information in your browser. Instead, manually enter the information for each purchase to give you time to think.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
Join Us for Our Next Meld University Events:
9th Annual: Document Shredding to Benefit Children’s Hospital of Alabama
When: Saturday, April 20th, 9:00 AM - 12:00 PM
Where: Meld Financial Office
Speaker: N/A
Meld Financial will be hosting our 9th annual Shred-It event on April 20th to benefit the Children’s Hospital of Alabama.
Understanding Medicare and What’s New in 2024
When: Tuesday, April 23rd, 3:00 - 4:00 PM CST
Where: Online Webinar
Speaker: Patricia L. Burris, CFP®
Medicare webinar will cover Medicare enrollment, supplement plans, strategies for maximizing benefits, and 2024 program updates.
Last Week's Riddle and Answer
Last Week's Riddle:
If a red house is made of red bricks, and a yellow house is made of yellow bricks, what is a greenhouse made of?
Last Week's Answer:
A greenhouse is made of glass.
Meld Financial, Inc. is a registered investment advisor.
The information contained herein should not be construed as legal advice or a legal opinion on any factual situation. Its contents are intended for general information purposes only. Always consult with a competent professional service provider for advice on tax, accounting, and other financial matters specific to your situation.
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
Riddles used in this publication may originate from the books: Lateral Thinking Puzzles by Paul Sloane; or from Workspace Solutions, LLC.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.