PUT IN WORK (6/3/2024)

The last couple of weeks have been very interesting for investors. First and foremost, we had Memorial Day on May 27th, which led to some relatively light trading on business days before and after the holiday, but this didn’t sway investors’ intentions. Markets were up on the 24th and the 28th—the Friday before and the Tuesday after Memorial Day—showing both promise and surprising strength from investors. Overall, however, markets were down last week. While the S&P 500 (SPY) didn’t suffer too big of a blow, ending down 0.4%, the Nasdaq (QQQ) took quite a significant hit, ending down 1.6%.

Despite the negative movement, the market has shown remarkable resilience. Both indices fought their way higher in the latter portion of the week. At one point during Friday’s trading session, the Nasdaq was down a significant 1.9% in just one day. However, as markets neared close, investors rallied and clawed back as many gains as they could. Thanks to this resilience, the Nasdaq only ended down 0.2% on the day, and the S&P 500 actually went from down 0.8% to up 0.9%.

The April PCE (Personal Consumption Expenditure) inflation reading is one of if not the main driving force behind the end-of-week rally, showing the slowest monthly core growth of the entire year. This is a significant win for investors, reigniting some investors’ beliefs in near-term rate cuts. While nothing is expected, and reports weren’t so good as to guarantee any cuts in the near future, if one were to occur, many are speculating it would happen in September.

Thankfully, CPI and PCE are on the decline, but that doesn’t mean the fight against inflation is over. We don’t know if the Fed will perform any rate cuts within the next few months, but as long as we stay on this trajectory, the idea will remain a potential future reality. Investors are now looking toward the next Fed meeting and CPI report, both of which will be released on June 11th and 12th.

(Nasdaq ETF (QQQ) price from May 2023 - 2024 — each candle is 1 week. Chart provided by tradingview.com.)

PORTFOLIO UPDATE

Most stocks in our portfolio inched lower alongside the market while others stayed put. There was very little abnormal movement across the entire portfolio, but we would like to note that we made a new purchase: Cognex (CGNX). To read more about the addition to our portfolio, click here. We plan to hold all currently owned stocks for the foreseeable future. As always, thank you for reading, and happy investing.