RALLY ROCKS ON... Momentum from the prior week’s rally sent the major stock indexes to another winning week, as traders felt a weakening economy would halt inflation, allowing the Fed to cut rates to avoid recession.
In a sparse week of economic reports, initial jobless claims jumped, seen as a sign of softening in the labor market. University of Michigan Consumer Sentiment dropped in May, thanks to a rise in inflation expectations.
Yet first quarter corporate earnings have far exceeded analyst estimates, and are on track to grow at around 10% for 2024. So, if the Fed does one or two rate cuts later this year, we could see the hoped-for soft landing for the economy.
The week ended with the Dow UP 2.2%, to 39,513; the S&P 500 UP 1.9%, to 5,223; and the Nasdaq UP 1.1%, to 16,341.
The bond market finished the week sideways, though the 30-Year UMBS 6.0% was UP .82, to $100.07. The national average 30-year fixed mortgage rate moved down in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Mother’s Day may have been yesterday, but it’s all year long in the housing market. Realtor.com found that 75% of survey respondents, in an ideal world, would live close to mom.