April 27, 2024 Market Update

The stock market rebounded last week, posting its first weekly advance in April.  The market is still well below its record high, set in late-March, but the latest bounce reversed a fair amount of this month’s damage.

Unlike the stock market, bonds didn’t shrug off the sticky inflation data.  Vanguard Total Bond Market ETF (BND), a proxy for the U.S. investment-grade fixed-income market, fell again in the week just passed.  The decline was fractional, but the latest drop marks the fourth straight weekly slide.

Last week, traders processed a deluge of corporate earnings reports, with approximately 180 companies — representing over 40% of the S&P 500 market value — reporting mixed first-quarter results.  Positive reports from Netflix, Spotify, and GM led to higher stock prices, while negative outcomes for Meta (formerly known as Facebook), IBM, and Hertz resulted in declining share prices.

In economic news, the Bureau of Economic Analysis released the latest U.S. GDP growth figures.  The economy expanded at a slower-than-expected annualized rate of 1.6% in the first quarter, with softening consumer spending, weaker trade and exports, and a decline in government expenditures, all contributing to the decline in growth.

Additionally, the "core" Personal Consumption Expenditures (PCE) index, excluding food and energy, increased by 3.7% in the first quarter, exceeding estimates of a 3.4% rise and significantly higher than the 2% gain observed in the prior quarter.  This increase provides further evidence that inflation remains persistent, suggesting that the Federal Reserve may be forced to keep interest rates high for longer than previously expected.

That’s all for now.  Have a great weekend and invest wisely my friends.