S&P 500 Coasts To New Record High On Fed's Assurance Of No Rate Hikes

The S&P 500 (SPX) set a new record high of 5,308.15 on Wednesday, 15 May 2024 before slipping back to close out the trading week that was at 5,303.27. The index rose a little over 1.5% about its previous week's close.

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The momentum behind the move was provided by Federal Reserve Chair Jerome Powell, who assured markets the week's higher-than-expected producer price inflation report would not respond by hiking U.S. short term interest rates.

With that likelihood greatly reduced, investors sent all the major U.S. stock indices higher during the week. Most notably, the Dow Jones Industrial Average (Index: DJI) crossed above the 40,000 milestone, going on to end the week at 40,004.35.

Meanwhile, the trajectory of the S&P 500 took it to the upper end of the dividend futures-based model's projected range, which can be seen in the latest update to the alternative futures chart.

 

 

Other things happened during the trading week that ended on Friday, 17 May 2024. Here's our summary of the week's market moving headlines:

Monday, 13 May 2024

• Signs and portents for the U.S. economy:
  • Brent hovers above $83 as inflation data takes centre stage
    • Oil prices settle up on demand optimism, US inflation in focus
  • The case for forever high interest rates
• Fed minions think they have a messaging problem, are expected to deliver a rate cut in September 2024:
  • Fed's Jefferson flags challenges on communications front
    • Hold steady on rates until clear inflation ebbing, says Fed's Jefferson
  • Fed to cut rates in September, say nearly two-thirds of economists
• Growth signs, bigger stimulus developing in China:
  • China's consumer prices rise for third month, signalling demand recovery
  • China to kick off 1 trillion yuan stimulus bond issues this week
• BOJ minions see inflation from weak yen:
  • Japan April wholesale inflation steady as weak yen boosts import costs
• Nasdaq, S&P, and Dow finish mixed as inflation data looms
  • S&P 500 barely changes as investors hold tight ahead of inflation data

Tuesday, 14 May 2024

• Signs and portents for the U.S. economy:
  • Oil settles lower as inflation data gives way to market jitters
  • Strong services fan US producer inflation in April
  • US bank failures could surge by almost 50, Nomura analyst says
    • Big-name funds pile into real estate debt as banks retreat
  • Biden hikes US tariffs on Chinese imports
    • China strongly opposes U.S. tariff hikes, pledging measures to defend rights
• Fed minions say won't hike rates because of producer price inflation running hot, see problem with household debt:
  • Fed's Powell: PPI 'mixed,' next move unlikely to be a rate hike
    • US Fed's Powell expects inflation to fall, though not as confident as before
  • NY Fed: Amid rising debt levels, some borrowers face increased stress
• Bigger trouble, stimulus developing in China:
  • Utility price hikes in parts of China hand another blow to households
  • China's central bank leaves key policy rate unchanged
• BOJ minions not liking the inflation they see:
  • Japan's firm wholesale inflation keeps alive near-term rate hike risks
• ECB minions thinking about rate cuts, but may delay them because the U.S. Fed is delaying them:
  • Easing euro zone inflation creates room for rate cuts, ECB's Knot says
  • Delayed Fed cuts could also slow ECB, Wunsch says
• Nasdaq notches new record closing high a day ahead of CPI; Dow, S&P also advance
  • Nasdaq hits record close after Powell reassures investors, CPI in focus

Wednesday, 15 May 2024

• Signs and portents for the U.S. economy:
  • US consumer prices rise less than expected in April; core CPI slows
    • Rising food costs leave hungry Americans $33 billion behind, report says
  • U.S. homebuilder sentiment tumbles as rates slow buyer traffic
  • Oil rebounds, gains 1% after US crude draw, lukewarm inflation data
• Fed minions say they're standing by to take action later in 2024:
  • Fed hawks and doves in their own words
  • Fed's Kashkari: rates should stay on hold 'for a while longer'
• Bigger stimulus developing in China:
  • Fiscal Bazooka: China Considers Buying Millions Of Homes To Save Property Market
• Bigger trouble developing in Eurozone:
  • German economic advisers cut 2024 growth forecast to 0.2%
• CPI gains boost S&P to close above 5,300 for the first time, propel Nasdaq, Dow to records

Thursday, 16 May 2024

• Signs and portents for the U.S. economy:
  • Oil up after US economic data strengthens rate cut expectations
  • US labor market fairly tight, broader economy losing steam
• Fed minions say they want better data before committing to rate cuts:
  • Fed remains cautious on cuts even as data improves
  • Fed's Mester seeks more evidence inflation pressures are easing
  • Exclusive: Fed's Williams welcomes inflation data, not ready to seek rate cuts
• Bigger stimulus developing in China:
  • China property shares jump on report of government plans to buy unsold homes4:51 AM MST
• Bigger trouble developing in Japan:
  • Japan's economy skids, clouding BOJ's rate hike plans
    • Japan Q1 GDP shrinks annualised 2.0% on weak consumption, exports
• ECB minions say they're in "no hurry" to cut rates, see weaknesses in Eurozone economy:
  • ECB not in a hurry to cut rates, should take measured steps after June, Kazaks says
    • ECB's Centeno sees lower interest rates soon, no word on June decision
  • Commercial property is weak link in euro zone finance, ECB says
    • ECB's rates framework may discourage money-market lending - Nagel
• Dow unable to hold onto 40,000, ends little changed; Nasdaq, S&P 500 dip slightly
  • The Dow's climb to a record 40,000 points

Friday, 17 May 2024

• Signs and portents for the U.S. economy:
  • Oil set for weekly gain on signs of improving demand
• Fed minions say they'll hike rates if they have to, even though nobody believes them:
  • Fed's Bowman repeats she's willing to hike rates if needed
• Growth signs, "historic" bailout developing in China:
  • China's factories fire up but consumer, property weakness persists
  • China unveils 'historic' steps to stabilise crisis-hit property sector
    • China property shares rise on bets for new steps to ease deepening crisis
• Nasdaq, S&P 500, Dow end record-breaking week near all-time highs
  • Dow ends above 40,000 milestone, indexes notch up weekly gains

The Atlanta Fed's GDPNow tool is forecasting an annualized real GDP growth rate of 3.6%, down from the +4.2% growth it projected in the previous week.

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