Economy
Inflation rose by 0.9% in the last month, according to the latest consumer price index report out Thursday. The jump was largely attributed to a 21% increase in gasoline prices, which accounted for about three quarters of the change. It might sound like putting lipstick on a pig, but removing food and energy prices, core inflation rose just 0.2% in March, which indicates a moderate change in inflation over the month. While we are now clearly seeing the impact of the Iran war and the oil spike on inflation, we've yet to see a material change in the employment numbers. Claims for unemployment insurance did rise to 219,000, up from 203,000 the week before, but remain relatively low, indicative of a stable labor market.
Minutes from the Fed's last meeting were released and show the consensus opinion is for one rate cut before the end of the year. There's just a couple of weeks left before Jerome Powell's swan song, and there's no expectations on Wall Street for a change in interest rates at that meeting. However, the odds of a decrease in rates have moved higher over the last week, which could be due to the two week cease fire agreement between the US and Iran combined with the latest inflation and jobs data.
Minutes from the Fed's last meeting were released and show the consensus opinion is for one rate cut before the end of the year. There's just a couple of weeks left before Jerome Powell's swan song, and there's no expectations on Wall Street for a change in interest rates at that meeting. However, the odds of a decrease in rates have moved higher over the last week, which could be due to the two week cease fire agreement between the US and Iran combined with the latest inflation and jobs data.
Markets
The S&P 500 had it's best week in months, climbing 3.56% as markets reacted to Tuesday night's announcement of a ceasefire. The move in markets over the last couple of weeks has brought the index nearly back to positive territory for the year, and within 2.3% of the previously recorded all-time high. Markets are clearly expecting a winddown with the Iranian war and looking ahead to earnings season which kicks off this week. As we mentioned last week, expectations have been rising heading in to this earnings season. We'll get a heavy dose from the financial sector of the economy to begin.
We now have back-to-back weeks where the market has risen by more than 3%. While not a guarantee that the bottom is in, the forward 12-month returns for the market after consecutive 3% weeks is above average, both in terms of win rate and cumulative gain, according to Ryan Detrick at Carson.
What We're Reading
- The Augusta Rule- Money Changes Everything
- 5 Ways to Avoid Tax Penalties in 2026- Morningstar
Have a great weekend.
Dogwood Wealth Management