This Weekly Financial Markets Update reviews the top market headlines: Inflation Cools Slightly in April, Business Optimism Ticks Up in April, Retail Sales Fall Short of Expectations

Top Three Market Headlines

Inflation Cools Slightly in April: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.3% in April over the prior month, down modestly from March's 0.4% pace. Key areas seeing higher prices in April included gasoline (+2.8%) and shelter (+0.4%), which together drove over 70% of the index's rise in April. Compared to the prior year the CPI increased 3.4%, a modest decrease from a 3.5% pace in March. The "core" CPI, which excludes volatile food and energy items, rose 0.3% on the month, down from 0.4% in March, while registering 3.6% on an annual basis versus 3.8% in March.

Business Optimism Ticks Up in April: The National Federation of Independent Business' (NFIB) Small Business Optimism Index, published last week, rose marginally to 89.7 in April from 88.5 in the prior month. This was the first monthly increase in the index in 2024, though it remains below the 50-year historical average of 98. As stated in the report, inflation remains a foremost concern for small business owners, with 22% citing it as the top problem in operating their business, though this was down marginally from 25% last month. Close behind was labor quality, flagged as the most pressing concern by 19% of business owners.

Retail Sales Fall Short of Expectations: The U.S. Census Bureau reported last week that sales at U.S. retail and food service establishments were flat in April versus the prior month. This fell short of economists' expectation for a 0.4% gain and was a deceleration from March's increase of 0.6%. The headline number was boosted by sales at gasoline stations, which rose 3.1%; excluding this, sales across all other categories dropped 0.2%. Areas that saw the strongest pullbacks included non-store (i.e., internet) retailers (-1.2%), sporting goods & hobby merchants (-0.9%), and motor vehicles (-0.8%).

Please note: There will be no Weekly Financial Market Update published next Monday, May 27 due to Memorial Day.

As of May 20, 2024 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.73% 1.77% 10.11% 24.03%
S&P 500 1.60% 1.12% 11.80% 29.51%
Russell 2000 1.79% -1.22% 3.90% 19.92%
MSCI EAFE 1.66% 2.15% 8.06% 15.69%
MSCI Emerging Markets 2.71% 5.81% 8.32% 15.78%
FTSE NAREIT Equity 2.37% -1.00% -1.20% 11.34%
Bloomberg Commodity 2.98% 7.07% 9.42% 10.03%
Barclays U.S. Aggregate 0.57% -0.63% -1.40% 1.38%