Languid Ending
As we are coming to the close of the second quarter, markets appeared listless this past week. United States equities, as measured by the Russell 3000 Index, declined 0.1%. Foreign equities, as measured by the MSCI All‑Country World Index ex-USA, were 0.2% lower for the week.
A modest rise in Interest rates over the past week resulted in a decline of 0.5% in bonds.
Mixed Economic Reports
The Conference Board (the Board) reported its Consumer Confidence Index (CCI) for June, which declined month‑over‑month (MOM) to 100.4 from 101.3. Its Present Situation Index, an assessment by consumers of current business and labor market conditions, increased MOM to 141.5 from 140.8. One disappointing bit of news was exhibited in the Board’s Expectations Index, which assesses consumers’ short-term outlook for income, business, and labor market conditions, which fell MOM to 73.0 in June from 74.9. The Expectations Index has been below 80 for five consecutive months, which according to the Board, typically implies a recession.
The Board also released its Leading Economic Index (LEI) for May. LEI decreased by 0.5% in May 2024 which followed a 0.6% decline in April. According to the Board, “U.S. LEI fell again in May, driven primarily by a decline in new orders, weak consumer sentiment about future business conditions, and lower building permits. While the Index’s six-month growth rate remained firmly negative, the LEI doesn’t currently signal a recession.”
S&P Markit (Markit) released its Global Flash (or preliminary) U.S. Composite PMI for June. According to Markit, “U.S. business activity growth accelerated to its fastest for 26 months in June,” reinforcing a sustained upward trend in economic activity (as measured by the PMI series) for the second quarter. Service PMI appears to have risen to 55.1 in June and has now increased for 17 straight months buoyed by rising demand.
This rising tide in Services PMI was complemented by an increase within Manufacturing PMI to 51.7 for June, which appears to have expanded for a fifth consecutive month. Markit qualified the rise in Manufacturing PMI due to the rate of growth of factory output slowing to the second weakest seen over this period.
Stay Tuned
Key economic releases this week include the final estimate of first quarter U.S. GDP and various indicators for May including Durable Orders, Wholesale Inventories, Personal Consumption, Personal Income, and closing with the final report on Michigan Sentiment for June.
 |
 |
Sources: BTC Capital Management, FactSet, LSEG, The Conference Board, S&P Global
The information provided has been obtained from sources deemed reliable, but BTC Capital Management and its affiliates cannot guarantee accuracy. Past performance is not a guarantee of future returns. Performance over periods exceeding 12 months has been annualized.
This content is provided for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Statements in this report are based on the views of BTC Capital Management and on information available at the time this report was prepared. Rates are subject to change based on market and/or other conditions without notice. This commentary contains no investment recommendations and should not be interpreted as investment, tax, legal, and/or financial planning advice. All investments involve risk, including the possible loss of principal. Investments are not FDIC insured and may lose value.