May 28, 2024

Drifting Higher

Weekly Market Commentary

Stocks have been drifting higher for several weeks as investors search for a catalyst that could drive shares in either direction.

Interest rates can influence market direction, but there hasn’t been much news recently on the rate front.

Federal Reserve officials would like to gradually begin reducing interest rates, but inflation hasn’t cooperated since the new year began.

Consequently, the Federal Reserve is comfortable maintaining its key rate, the fed funds rate, at the current level as it seeks more clarity on potential price developments heading into and through the summer.

Meanwhile, the A.I. narrative hasn’t changed, and the economy is still expanding, although some recent indications suggest that growth may be slowing down.

However, there is not much to suggest that economic activity is about to stall.

In other words, modest economic growth and stable rates have underpinned stocks in a relatively dull rally that has the major indexes at or near all-time highs, according to MarketWatch.

In Memory of Their Valor

As we reflect on Memorial Day, we pause to honor the brave men and women who gave their lives to defend and serve America.

We honor their courage, dedication, and selflessness, which have ensured our freedom and protected our way of life.

  • Civil War – 620,000 – 750,000 on both sides
  • World War II – 405,399
  • World War I – 116,516
  • Vietnam War – 58,209
  • Korean War – 36.516
  • American Revolution – 25,000
  • War of 1812 – 20,000
  • Mexican-American War 1846 – 13.283
  • War on Terror – 7,078
  • Spanish-American War 1898 – 2,446 

Source: Estimates vary on the number of casualties in earlier conflicts.

Reproduction Prohibited without Express Permission. Copyright FDP Wealth Management. All rights reserved. Advisory Services offered through FDP Wealth Management, LLC, a state Registered Investment Advisor. Securities offered through Valmark Securities, Inc., Member FINRA/SIPC | 130 Springside Drive Suite 300 Akron, OH 44333-2431 | 800.765.5201. FDP Wealth Management, LLC is a separate entity from Valmark Securities, Inc. If you do not want to receive further editions of this weekly newsletter, please contact me at (949) 855-4337 or e-mail me at or write me at 8841 Research Drive, Suite 100, Irvine, CA 92618. FDP Wealth Management, LLC, Valmark Securities, Inc. and their representatives do not offer tax or legal advice. You should consult your tax or legal professional regarding your individual circumstances. Indices are unmanaged and cannot be invested directly in. Past performance is not a guarantee of future results.


A Steady-as-She-Goes Fed and a Tame Inflation Report

As expected, the Federal Reserve announced last Wednesday that it held its key rate, the fed funds rate, unchanged at 5.25 – 5.50%. The Fed left the door open to a cut in rates later in the year if inflation makes meaningful progress toward its 2% annual goal or if there is an unexpected weakening in the labor market.

Strong Jobs Report, with a Caveat

The U.S. Bureau of Labor Statistics reported that nonfarm payrolls in May rose 272,000, easily beating expectations of 190,000 per the Wall Street Journal. Over the past three years, nonfarm payrolls have usually topped expectations. That narrative remains intact.

Housing Prices Hit New Record

The price of a home hit a new record, according to the latest data on housing prices. The S&P CoreLogic Case-Shiller 20-City Home Price Index, which measures monthly housing prices in 20 major metropolitan areas, rose 1.6% on a nonseasonally adjusted basis in March.

How Do Investors Spell Relief?

Investors celebrated an ‘in line with expectations’ CPI that suggested the rate of inflation isn’t accelerating. It’s a small win, but it was enough to send the three major market indexes, the Dow, the Nasdaq, and the S&P 500 to new highs.

An Annual Ritual at the Gas Pump

You’re right if you have this nagging feeling that gas prices rise in the spring. As the graphic illustrates, on average prices rise through Memorial Day, plateau over the summer, and slip in the fall. This year is no exception, as prices echo the seasonal pattern.