This Weekly Financial Markets Update reviews the top market headlines: Fed’s Preferred Gauge Signals Steady Inflation Pace, Beige Book Indicates Modest Economic Growth, Home Prices Reach All-Time High in March.

Top Three Market Headlines

Fed’s Preferred Gauge Signals Steady Inflation Pace: The Bureau of Economic Analysis (BEA) reported last week that the Personal Consumption Expenditures (PCE) price index, known to be the Federal Reserve’s preferred inflation gauge, increased 0.3% in April over the prior month, consistent with the pace reported in each of the prior two months. The "real" PCE index, which excludes the volatile food and energy categories, rose 0.2%, down marginally from a 0.3% pace in March. From the same month one year ago, the PCE rose 2.7% while the real PCE was up 2.8%, both unchanged from the pace witnessed in March.

Beige Book Indicates Modest Economic Growth: The Federal Reserve last week released its most recent Beige Book, a periodic compilation of anecdotal information summarizing economic conditions across the 12 Federal Reserve districts. From early April to mid-May, most districts reported slight or modest growth in economic activity. Price increases were modest over the period, and most districts reported heightened price sensitivity among consumers, resulting in retail spending being characterized as "flat or up slightly." In terms of employment, a majority of districts noted negligible to moderate job gains, with the rest reporting no change.

Home Prices Reach All-Time High in March: Home prices across the U.S. continued rising in the month of March, according to the S&P Case-Schiller Home Price Index released last week. The 20-city composite rose 7.4% versus the prior year and hit another all-time high. For the fourth straight month, all 20 of the metro areas tracked by the index posted positive annual gains, led by an 11% year-over-year increase in San Diego. New York City and Los Angeles, which together account for around 30% of the index, clocked annual gains of approximately 9%. Conversely, growth has slowed in certain Sunbelt markets like Tampa, Phoenix, and Dallas that saw the strongest price increases during COVID.

As of June 03, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.73% 0.63% 8.88% 23.56%
S&P 500 -0.49% 0.67% 11.30% 28.19%
Russell 2000 0.04% -2.37% 2.68% 20.12%
MSCI EAFE -0.05% 1.21% 7.07% 18.53%
MSCI Emerging Markets -3.10% 1.01% 3.41% 12.39%
FTSE NAREIT Equity 1.69% -2.74% -2.93% 10.17%
Bloomberg Commodity -1.84% 4.49% 6.79% 10.95%
Barclays U.S. Aggregate 0.04% -0.87% -1.64% 1.31%