Weekly Market Update

A second week with more good news!

So, why another week setting at least a small positive trend? We’ve talked here about inflation and measures used to track it. It’s THE economic issue all of us are struggling with and certainly is on the market’s mind. One of the indexes tracking inflation is the PCE (Personal Consumption Expenditure) which is less widely covered yet, is the Fed’s preferred index. While CPI (Consumer Price Index) is the media’s preferred measure, the differences are subtle so, suffice it to say that the market knows these differences and pays closest attention to the Fed’s take in these matters.

The FEDs fierce efforts to tame inflation, mainly through key interest rate increases has the market on edge hoping increases aren’t taken too far resulting in a tanked economy. So, any news the Fed might take to mean rate hikes are working, the market will deem “good news”. Last week PCE estimates matched expectations for first time in many months. Whether this is an accurate read of the Fed remains to be seen but, after several ‘bad news’ reports where estimates were off and things looked worse, we’ll give the market credit for responding appropriately if only fleetingly.

All 24 benchmark indexes we track posted solid gains last week, except Emerging Market stocks. Gains were robust and broad based across the entire market. U.S. equities surged the most with value stocks generally outperforming their growth counterparts. This appeared most strikingly with Large Value outperforming Large Growth by over 3%. Foreign stocks similarly posted gains of 3-3.25% in developed markets.

Finally, Bond indexes that have lost the most ground year-to-date were the strongest performers of the bunch posting of 2% to 2.8%. Other less ‘risky’ fixed income moved ahead yet under 1.0%

Have a great week, and let’s hope to see more of this momentum next week!