Equity Rise Continues as CPI Eases
Equities jumped on Wednesday after the Consumer Price Index (CPI) report for July came in well below expectations. This ended a four-day run of sideways movement that helped enable the Chicago Board Options Exchange Volatility Index (VIX) to bleed lower.
Equity Market Strength Continues
Stocks moved higher this week with the Russell 3000 Index returning 6.2%. This week’s strong showing was a major contributor to the 10.3% return that has been generated since the start of the third quarter.
Optimists Rejoice a More Data-Dependent Fed
Equities surged on Wednesday as Chairman Powell spoke following another 75-basis-point increase in the federal funds rate. This helped bring equities into the green for the week.
This past week equities provided some relief to an otherwise abysmal year. Domestic equities advanced +4.1%, with large caps increasing +4.0% while small caps rose +5.4%. Outside the U.S., foreign equities increased +5.0% as developed markets rose +4.9% and emerging markets eked out an upward move of +1.5%.
Equities Lose Steam as CPI Surges
Equities have been losing steam following a sharp quarter-end rally. The S&P 500 finished the week down 1.1% and is now down almost 20% year-to-date.
First Quarter GDP report sees drop in PCE
This week brought a final recording of the first quarter’s GDP, sealing that number at -1.6%, the first negative quarter since 2020 and a sharp contrast to the expansionary monetary policy primed 5.7% of 2021.
Tough Quarter Ends on a Positive Tone
Equities staged a strong rally off their monthly lows as quarter-end rebalancing forces drove the action. As target date fund assets under management have grown, this has created a mean reverting force at quarter end.